Are takeout platforms liable for quotation of different delivery fees?
The Beijing Internet Court (BIC) recently gave judgment of the first instance in a service contract dispute between plaintiff Chen and the defendant – an online takeout platform. It concluded that the platform showed different delivery fees on two different pages of the same ordering which constituted contractual negligence. The defendant was thus ordered to compensate Chen with 1 yuan ($0.16) as economic loss.
On Oct 29, 2019, when ordering food from a takeout platform APP, Chen found out that the delivery fee shown on the goods selecting page was 6 yuan, but was 7 yuan on the checkout page. Chen returned to the goods selecting page to refresh the operation but still ended up paying 7 yuan as a delivery fee. Chen believed that the takeout platform’s prices were fraudulent and took the matter to court.
The defendant takeout platform claimed that Chen was aware of the discrepancy of the delivery fees on different pages and paid it voluntarily. The reason for the discrepancy was that the intelligent location was applied on the first page of the order, and according to the coordinates of the user attained by authorization, the delivery fee calculated at that address was not the actual delivery fee, which was computed by the final address provided by Chen. The charge of fraudulent pricing therefore did not stand.
To investigate the case, BIC went to the defendant company to inspect their database information. The court retrieved a number of delivery orders by giving random specifications onsite. The statistics showed that most of the randomly selected orders were consistent between the located addresses on the first page and the actual receiving addresses, while a small number of cases showed a discrepancy between located addresses and actual receiving addresses. Sometimes the located address was closer and sometimes further away than the actual receiving address. The court determined that the discrepancy of delivery fees resulted from different locating methods adopted by the takeout platform.
The court concluded that:
1. The takeout platform’s practice did not constitute fraud.
Fraud in civil law refers to the behavior of one party in inducing the other party by deliberately providing false information or concealing true information. The takeout platform adopted different locating methods on the goods selecting page and the checkout page to calculate delivery fee objectively. It was backed up by factual proof and so there was no falsehood or concealment of true information. Subjectively the platform did not have the intention to deceive Chen, and thus did not commit fraud.
2. The discrepancy of delivery fees nevertheless indicated that the takeout platform failed to fulfill its obligation to clearly communicate, and was thus liable in negligence.
(1) It is necessary for the takeout platform to be clear about delivery fees. Onsite investigation showed that discrepancy could occur on delivery fees by different locating methods and could hurt consumers' rights and affect their benefits when the actual delivery fee is higher than the estimated fee. It is consequently necessary to inform the client on the estimated delivery fees.
(2) It is feasible for the takeout platform to inform consumers on estimated delivery fees, which general consumers don’t have the capacity to judge. As the developer and user of internet service technologies, the takeout platform has both the capacity to forecast potential discrepancies of delivery fees based on different locating methods and the capacity to verify estimates by using accumulated order data. The takeout platform therefore has the capacity to resolve the issue and alone can clarify the nature of the delivery fee shown on the first page.
(3) Providing estimated delivery fees will not significantly increase the transaction cost of the takeout platform. Only appropriate adjustment on the expression of the delivery fee shown at the first page is needed to ensure that consumers are aware of the situation.
Therefore, when the takeout platform provides estimated delivery fee information on its homepage, it is obligated to say that the fee may not be the fee actually charged. The failure to do so constitutes negligence.
3. Compensation liabilities of the takeout platform
The inconsistent delivery fees were provided to the consumer via electronic data. Without clarification from the takeout platform, it was difficult for Chen as a consumer to know that the 6-yuan delivery fee was only estimated. Besides, although Chen did not provide sufficient evident, Chen spent necessary expenses to safeguard Chen’s legitimate rights and interests. In conclusion, plaintiff Chen’s interests were damaged and the defendant takeout platform should compensate for it.
Details of the judgment
The defendant takeout platform was ordered to pay 1 yuan as economic loss to the plaintiff. The other claims of the plaintiff were overruled.
Tips from the judges
Ordering food online is part of daily life in modern society. This case resulted from inconsistent delivery fees on a takeout platform. Although it was ruled that the takeout platform did not intend to defraud, it should have fulfilled its obligation of informing consumers on the nature of the delivery fee to guarantee the consumer’s right to know. Though an individual case, it reflects a universal problem. E-commerce platforms need to promptly improve their applications to avoid similar disputes.