Newsletter
AUCTION SITE RESPONSIBLE FOR ILLEGAL ADVERTISING
Auction websites and other Internet trading platforms have become highly popular channels for promoting and advertising goods. Whether auction site operators or other providers of Internet trading platforms bear any liability for the sale of illegal goods, or for illegal content in advertising, is a highly controversial issue in practice. In a 2003 summary judgment in a case brought under the Tobacco Hazards Prevention Act, the Taipei High Administrative Court held that an auction website operator was a publishing or media enterprise as referred to in Article 22 Paragraph 2 of the Act, and that its broadcast or publication of advertisements for tobacco prod-ucts would violate the Act. The point at issue in the case was how to determine the negligence and liability of an auction website operator.
The auction site operator had asserted that as an industry practice, scanning the title fields of web pages could filter out some 90% of illegal goods, and this was sufficient to discharge its duty of care in its business operations. If a website op-erator were obliged to scan the entirety of all texts, its costs would be increased by tens or even hundreds of times before it could be said to have objectively discharged its duty of care. This would clearly be starkly at odds with the concept of negligence.
However, the court pointed out that the auction website operator provided a trading platform whereby users may key in explanatory content and upload photographs, which could then be automatically displayed by the computer system. The operator naturally had a duty to exercise effective supervision and control. If its screening activities were unable to detect and remove ad-vertisements for tobacco products that had ap-peared on its trading platform for a period of several days, it failed to exercise effective su-pervision and control of its trading platform, and could not absolve itself of liability for negli-gence.
It can be inferred from this judgment that an auction website operator or other Internet trading platform provider may also be held liable under the Trademark Act, Patent Act, Copyright Act, Fair Trade Act, or other legislation, for auctions of, or advertisements for, goods that infringe against trademarks, patents, or copyrights. This would have a tremendous impact on such Inter-net businesses. However, it remains to be seen in individual cases whether this inference is justi-fied.