Marketplaces and the need to identify their users – Comment to case “Pergierycht, Damián vs OLX S.A.”
Data Privacy & Data Protection Department report | Marketplaces and the need to identify their users – Comment to case “Pergierycht, Damián vs OLX S.A.”
Dear Sir or Madam,
On 30 September 2021, the National Court of Appeals in Commercial Matters, Division C, rejected the decision of the court of first instance in the case “Pergierycht, Damián v. OLX S.A.”, as it considered that the claims for damages suffered by the plaintiff were admissible.
Regarding the facts, the plaintiff (buyer) had contacted a mobile phone seller through the OLX platform, setting the day, time, and place of delivery of the goods. When the buyer met the alleged seller, the latter pointed a firearm at him and demanded the money he had brought with him to pay for the agreed purchase. The buyer managed to escape but was hit by a gunshot and suffered physical injuries.
In this context, the buyer sued OLX for damages suffered. In the answer to the complaint, OLX argued that its website is an online classified ads platform, which is limited to making offers known to the public, and that third parties are the ones who create publications offering products. It also pointed out that the buyer contacted the alleged seller via WhatsApp -completely unrelated to OLX- a fact that was considered proven in the criminal court.
The Court of Appeals overturned the ruling issued by the National Commercial Court No. 29, which found that the plaintiff’s claims were inadmissible, considering that:
(i) While it is not clear that OLX was obliged to verify that the alleged seller actually had the mobile phone in his possession, it is clear that OLX was obliged to verify that the seller existed and therefore had to verify his identity;
(ii) although the deal (i.e., the purchase and sale of the mobile phone) was concluded outside the platform, as buyer and seller communicated via WhatsApp, OLX cannot be relieved of liability since it did not take the slightest precaution to control the security of what did happen on its platform, verifying who the users were and allowing them to register in virtual anonymity;
(iii) even though OLX is an internet intermediary, this does not enable the case to be resolved in the light of the doctrine established by the Argentine Supreme Court of Justice in “Rodríguez, María Belén v. Google Inc.”, since, although the published contents are from third parties, OLX is the one which provides the personal data without which the users could not connect (this being the service provided by the platform, i.e., allowing those parties interested in entering into a contract to enter into a contract);
(iv) the service provided by OLX must comply with the diligence required of a professional provider operating in a risky environment that enables entering into a contract between strangers among a diverse, massive, unadvised, and possibly impulsive public, which must be subject to minimum care;
(v) not having requested the seller’s details, not having validated his ID, not having demanded facial recognition of the account, nor having adopted any other method to allow his proper identification, are elements that indicate that OLX facilitated the manoeuvre, did not dissuade it – as would presumably have been the case if it had demanded such identification from the offender – and ignored the matter, leaving the unwary and needy to their fate.
By virtue of the foregoing, the Court of Appeals granted most of the damages (physical, psychological and moral) requested by the plaintiff, and also found punitive damages to be appropriate.
In view of the above, we consider this criterion adopted by the Court of Appeals to be of great relevance, as it raises the need for companies called “Marketplace” (digital platforms where third parties are allowed to offer and purchase products or services) to implement the necessary technological measures to identify their users, a matter that does not arise from the regulations nor is common practice in the market.
Do not hesitate to contact us should you require any further information on this matter.
Emilio Beccar Varela
Mariana Lamarca Vidal
Martín Beccar Varela