The Effect of Intellectual Protection Policies on Online Retail Platforms

Abstract

Intellectual property (IP) protection is an important tool for promoting innovation and quality improvement on online retail platforms, yet stringent protection policies may not always benefit IP owners. By collaborating with an e-commerce platform, we study the effects of IP protection policies that fight against image plagiarism on the platform. We find that strict punishments on infringing sellers, such as deleting product links or removing product images, lead to decreases in sales and user visits for the infringed sellers. Further investigation shows that this may be due to reduced advertising effect as similar product images on the same search result pages can increase the demand for copyrighted products. Our findings suggest that protecting IP is a complex issue, and strict punishments on infringing sellers may undermine the original purpose of such policies.

Keywords: Intellectual property protection, advertising effect, e-commerce, digital platform

JEL Classification: M30,M38