In a meeting with investors promoted by Bank of America, the general director of Procon-SP, Fernando Capez, advised against investments in Shopee. In an interview with Techblog, the executive said that e-commerce in Singapore does not comply with Brazilian legislation and should be fined for offering products without invoices. The fine can reach R$ 10.9 million, taking into account the billing.
Procon-SP should fine Shopee
The meeting this Wednesday (27) brought together 100 investors from the US, China and Japan. Some of the participants were Bank of America clients and owned shares of Sea Group, Shopee’s controller, through the bank’s investment portfolio.
According to Capez, investors were curious to know if it was trustworthy to bet on Singapore’s e-commerce.
The general director of Procon-SP also mentions that the justification presented by Shopee for selling irregular products is under analysis, but he believes that a fine for the retailer is almost certain. Capez stated in an interview with Techblog:
“Experts are analyzing Shopee’s justification. In my opinion, as she does not proceed, they should fine [a empresa]. The fine can reach up to R$ 10.9 million, depending on the company’s revenue. Procon-SP is considering [a multa] and the ink is full—just put it on the paper. The sanction would be for offering products without an invoice, counterfeit and contraband. We’ve been watching this for a long time, and Procon’s role is to defend consumers in the state of SP and defend them from Shopee.”
Shopee entered the sights of Procon-SP since last month, when an increase of 5,600% in complaints regarding the retailer was found. Most were related to the service and the difficulty to reimburse purchases.
The maximum fine that Procon-SP can apply is R$ 10.9 million, depending on the billing. The Sea Group, controller of Shopee, had revenue of US$4 billion in 2020.
Capez advises against investing in Shopee
To Bank of America’s international guests, Capez advised against investing in Shopee, at least for the time being.
To Techblog, the director of Procon-SP stressed that the Asian company worries not only the pro-consumer body, but also Brazilian authorities. “The Civil Police, through the Consumer Police Station, is fully aligned with Procon-SP”, said the executive.
He also mentions that the union between the entities is so cohesive that the agreement made between Procon-SP and the Civil Police of São Paulo with Mercado Livre to prevent the sale of illegal products will be signed at the headquarters of the Consumer Police. Before, it was the ML that was in the crosshairs for the sale of pirated items, but the focus has changed: Shopee would be, currently, the digital platform that most worries authorities.
Also according to the general director of Procon, Shopee can be publicly warned. A counter-recommendation for consumers to avoid the platform is also under discussion.
Shopee is “rolling”, says Procon-SP
According to Procon-SP, representatives of the company in Brazil are “rolling up” to sign an anti-piracy agreement. Another concern is that the retailer does not yet have official headquarters in Brazil, which would make dialogue with authorities and compliance with Brazilian law difficult. During the meeting, investors linked to Bank of America reportedly complained that Procon-SP is “overthinking” with Shopee.
Finally, it is possible that Procon-SP may sue Shopee for collective pain and suffering. Capez claims that the retailer has violated the Consumer Protection Code (CDC), and that this law overrides the Marco Civil da Internet – used by Shopee, AliExpress and OLX to justify the sale of illegal products.
“The Marco Civil da Internet is a legislation that covers the relationship between provider and user. In this case, we are dealing with consumer protection. We are in front of public and collective interest”, explained Capez. The CDC, in this case, should be considered because it is a specific law on consumer rights.
Finally, in the assessment of the general director of Procon, it would be “prudent” if the Shopee signed the Antipiracy guide, by Senacon (National Consumer Department), as did the Free Market.
Wanted by Techblog, Shopee did not respond to the possibility of a fine until this report was published. Bank of America also did not respond about the meeting with Procon-SP.