Did ezbuy really practise 'scalping'? What could happen next?

Scalping takes place when people resell items for a large or quick profit. PHOTO: SHIN MIN DAILY NEWS

SINGAPORE - Can online shopping platform ezbuy take legal action against Alibaba Group, the parent of e-commerce giant Taobao, for making "inaccurate claims" of scalping against ezbuy?

According to experts, ezbuy could take Taobao to court, or rely on the dispute resolution clause in any contract it might have signed with the Chinese firm.

Lawyer Nicolas Tang said: "If the facts establish that ezbuy never engaged in any form of scalping, then it may be able to commence legal proceedings against the Alibaba Group for inaccurate claims made, and for any losses incurred by ezbuy as a result of the Alibaba Group's and Taobao's actions."

Scalping takes place when people resell items for a large or quick profit, said Mr Tang. An example of this in Singapore was when touts tried to resell tickets to the Coldplay concerts in March and April at inflated prices.

ezbuy found itself involved in a war of words with Alibaba Group earlier this month, after it accused the Chinese giant of bullying. The Chinese company retorted by calling ezbuy's act of creating accounts to buy items from Taobao and reselling them an act of "scalping".

The conflict between the two firms led to a huge backlog of orders placed on ezbuy for Taobao purchases on Nov 11 for the Singles' Day sales event.

Legal and retail experts The Straits Times spoke with said they could not say for sure if ezbuy practised scalping, because they did not have the full details of the case.

However, Nanyang Technological University's Dr Lynda Wee said: "The digital world is very transparent, and if customers don't see value in what ezbuy does for them, why would they shop there?"

Dr Wee, who is an adjunct associate professor at the university's Nanyang Business School, said: "Customers can go directly to Taobao, so ezbuy must be addressing some needs they have, especially for those who are less experienced with online shopping. Perhaps they want to deal directly with someone with an 'sg' in their URL."

According to Chinese lawyer Yu Zheng, Chinese law does not officially define "scalping". He also said that the Chinese term for "scalper" ("huang niu") used by Taobao and ezbuy covers a wide range of activities, some of which are not illegal.

Lawyer Koh C-u Pinn said: "Only by closely examining the nuances and in-depth details of the case can a legal adviser assess whether the elements of defamation are sufficiently made out in this situation for a successful defamation suit, whether in Singapore or China."

In response to queries, an ezbuy spokesman told The Straits Times that the company suffered some reputational damage "due to the unfair comments made" by Alibaba Group.

He said: "Ideally, we hope that things can be settled amicably, and come to a consensus with them... We prefer to not take any legal action, which consumes time and resources, and instead hope to focus our efforts on bettering our service and product offerings for our customers."

Join ST's WhatsApp Channel and get the latest news and must-reads.