Dirty tricks by China’s ecommerce vendors are the target of new laws

China’s online ecommerce market is massive, but it’s also kind of a jungle. Especially in the C2C wilderness that is Taobao, shop owners use all kinds of shady tactics like brushing to make sure they get the sale, whether or not the consumer is actually getting what they want. Now Hangzhou, they city that plays host to Alibaba HQ, has passed a new set of regulations on ecommerce transactions that makes behavior like that illegal and punishable by local authorities.

The new regulations will require Hangzhou sellers to register as businesses with the ecommerce platform they use, and levy fines of RMB 10,000 to RMB 30,000 (US$1,600-4,800) on platforms that don’t collect the proper information. Sellers can also be fined between RMB 10,000 to RMB 30,000 for doing any of the following:

• Using the name or trademark of a famous company, product, brand, person, social organization, or government organization without permission
• Leave negative reviews for, slander, or falsely report rival sellers and shops
• Buying products in bulk and then returning all of them or refusing to accept delivery to harm rival shopkeepers’ profits
• Falsifying internet transactions [like “brushing”] to get good reviews
• Using technological measures to interfere with search rankings
• Releasing fake products or false service information
• Harming national interests, public interests, or the lawful rights of others

Additionally, sellers can be fined between RMB 2,000 and RMB 20,000 (US$320-3,200) if they engage in any kind of customer harassment like calling customers who left negative reviews and berating or threatening them until they change their review score.

Because these laws were passed by the city of Hangzhou and not China’s national government, they don’t apply to all online sellers yet. But they certainly provide a window into the kinds of dirty tricks that some Chinese C2C shopkeeps go in for, and the dangers consumers still face when shopping on C2C marketplaces like Taobao.

The new regulations may also prove to be a blueprint for similar laws in other locations and even nationally. Chinese authorities are getting more and more involved in regulating the ecommerce industry and C2C platforms are one of the worst culprits when it comes to exploiting and tricking customers.

Of course, how effectively these rules can be enforced remains to be seen. Some violations, like leaving negative comments for rival sellers or harassing customers by phone, should be relatively easy for police to track. But behaviors like brushing – in which sellers pay third-parties for good reviews and then ship them empty boxes to make the transaction look real – can be very difficult to catch.

(Source: Sina Tech)