Jumia can be sued in disputed third party transactions, Comesa rules
What you need to know:
- The Comesa Competition Commission made the ruling on February 23, following investigations into conduct of Jumia, which started on September 10, 2021
The Common Market for Eastern and Southern Africa (Comesa) has ruled that consumers have a right to sue Jumia in disputed transactions where information on sellers cannot be established.
Dr Willard Mwemba, the Comesa Competition Commission director, made the ruling on February 23, following investigations into conduct of Jumia, which started on September 10, 2021.
The Commission, in the course of the investigation, reviewed Jumia’s platforms in different countries along with its terms and conditions, to determine if they were in compliance with the Comesa Competition Regulations and it was observed that Jumia had excluded itself from being party to the contract for sale or purchase, claiming it did not have liability in connection with a transaction under dispute.
It was also observed that Jumia had dissociated itself from transaction yet in actual sense, the consumer deals only with Jumia to order, make payments and make deliveries on behalf of the seller
It was further noted that in some cases, Jumia does not provide to consumers any documents that connect the transaction to the third-party as the seller.
Therefore, in his ruling, Dr Mwemba noted that Jumia, which is present in 23 countries including Uganda and Kenya, among others must amend sections of its terms and conditions to include entities that are liable in case of any third party disputes in transactions.
The amendments, he noted, must also include details of where information of persons liable could be found, so that consumers know on whom to initiate legal action if need be.
It was also observed that Jumia had not indicated the registered company that owned the platform, and who their actual legal representatives were, which makes it difficult for consumers and authorities wishing to initiate action against Jumia to identify the party to pursue.
Other concerns such as failure to declare that the information on its website was complete or accurate, what would happen to transactions still in the process in case the marketplace is discontinued, failure to provide a preview of the order before payment and a short return policy of 15 and seven days were also raised.
In the findings, the Commission indicated that Jumia’s terms and conditions appeared to amount to false and misleading representation and its conduct possibly unacceptable, which is contrary to Comesa laws and guidelines.
Therefore, Dr Mwemba noted that Jumia must amend sections of its terms and conditions to among others, provide for the entity that is served for legal purposes in case of a dispute, reflect that where Jumia is the seller, it is a party to the contract of sale, commit to the completeness or accuracy of information published on its marketplace and include clauses that specify that discontinuation of the marketplace shall be done without prejudice of the consumer’s rights in respect of any unfulfilled orders or other existing liabilities.
Other recommendations included that Jumia introduces more dedicated channels of communication for complaints as well as put in place a transparent dispute resolution that is known to consumers.
Ms Lyz Zaninka, the Jumia head of brand and communications, yesterday said the company was adhering to recommendations of Comesa, and was ready to “ensure that policies are protective of consumers.”
“We take pride in adhering to the highest standards of consumer protection and ensuring that all products sold on our platform meet our strict quality guidelines,” she said.
Impact of the ruling
The ruling, has however set a precedent on e-commerce players in an industry that is still taking shape in much of Africa.
Mr Stephen Obeli, the founder of Kweli.Shop, an e-commerce platform said the Comesa ruling will de-risk e-commerce for consumers.
However, Mr Obeli said the ruling is likely to introduce a new set of burdens on marketplace operators and certainly increases the cost of doing business.
“It might also make selling online less attractive to prospective third party vendors as they get more exposed to legal consequences, yet they control only a part of the process with the rest of it including packaging and last-mile being handled by the marketplace operator,” he said.
Mr Obeli also noted that some recommendations such as the requirement for the marketplace operator to commit to keeping the platform available during events beyond its control are, however, unconscionable as a platform operator cannot in the true sense commit to controlling affairs beyond its power.