Jumei has apologized to consumers and promised to refund the fake products. It has explained that it has strict rules in place to prevent fake products from being sold through its website, only that it couldn't detect the fraud the third-party vendor was carrying out.

In other words, Jumei has shifted the major part of the responsibility to the third-party vendor. If regulators do not step in, the company, along with the other e-commerce platforms involved, could emerge unscathed from the scandal.

A large number of third-party vendors are active on Jumei's platform. And since these third-party vendors are estimated to contribute more than half of the platform's revenues, it is difficult for Jumei to carry out due diligence to completely rule out cheating in e-transactions.

The cheated consumers logged on to Jumei's website, not that of the third-party vendor, to buy luxury goods. So Jumei cannot escape punishment by simply saying that it didn't know the third-party vendor was cheating buyers.

Many online dealers are involved in cheating, and regulators should punish all of them to protect consumers' interests and prevent the fraudulent companies from continuing to make money by violating laws and intellectual property rights.

Current laws do not allow consumers to file a class action against companies involved in cheating; they can only sue the companies individually. Since this is a lengthy and complicated procedure, many consumers decide against going through it to protect their interests. As a result, the companies are not made to pay much as compensation to victimized consumers even if they lose a case.

Such "leniency" for commercial interests - companies making huge gains from cheating but paying insignificant amounts if caught in the act - has to a large extent encouraged some unscrupulous market players to cheat customers.

Therefore, the government must revamp its legal system to ensure that the cost of cheating in business outweighs the potential gains in order to protect consumers' interests. Or else, it will be almost impossible to develop an honest business environment.

The author is a senior writer with China Daily. xinzhiming@chinadaily.com.cn

(China Daily 08/02/2014 page5)