THE BOTTOM LINE
- Increased Liability Risk: Online marketplace operators (e.g., Amazon, Alibaba, eBay) may face direct liability for trademark infringements committed by sellers on their platforms if they do not act proactively.
- “Active Role” is the New Standard: The opinion suggests that merely hosting content is no longer a sufficient defense. Platforms that actively promote or optimize third-party listings could be seen as primary infringers.
- Proactive Policing Required: Businesses should immediately review their notice-and-takedown procedures, as well as their advertising and product presentation tools, to mitigate a significant shift in legal exposure.
THE DETAILS
In a significant opinion that could reshape e-commerce liability, the Advocate General (AG) has recommended that the Court of Justice of the European Union (CJEU) adopt a stricter view on the responsibility of online marketplaces. The case centered on whether a platform operator, which provides a comprehensive sales environment including advertising, payment processing, and shipping logistics, could be held directly liable for a third-party seller offering counterfeit goods. The AG argued that the platform’s role often transcends that of a passive intermediary, especially when it creates a seamless shopping experience where the marketplace’s own brand and the seller’s product become blurred in the mind of the consumer.
The core of the AG’s reasoning hinges on the concept of an active role. Under the EU’s Digital Services Act and e-Commerce Directive, passive hosts are granted a safe harbour from liability. However, the AG opined that when a platform uses algorithms to prominently feature infringing products, bundles them in marketing campaigns, or presents the listings in a way that implies endorsement or verification, it is no longer passive. This active involvement constitutes a form of “use” of the trademark in the course of trade, making the platform itself a potential primary infringer, rather than just an accessory. This moves the goalposts from a reactive notice-and-takedown obligation to a more proactive duty of care.
For CEOs and in-house counsel, the commercial implications are profound. If the CJEU follows this opinion, as it does in the majority of cases, the operational and financial risks for e-commerce platforms will escalate. It will no longer be enough to simply react to complaints from brand owners. Instead, platforms may need to invest heavily in preventive screening technologies and vet sellers more rigorously. This opinion signals a clear trend in EU law: the more a platform does to facilitate and optimize a sale for its own commercial benefit, the more responsibility it will bear for the legality of that sale.
SOURCE
Source: Court of Justice of the European Union
