Beijing Internet Court
Digital Consumption
Top Ten Typical Cases

Case 1

Case of Formatting Clauses Concerning Cross-Border E-Commerce Platform: The Agreement That Excludes the Jurisdiction of the Court in the Country Where the Consumer Is Located by Formatting Clauses Is Invalid

—— Gao X v. XX Company on Information Network Sales Contract Dispute 

[Typical Significance]

This case is the first to determine the invalidity of the jurisdiction clause of cross-border e-commerce agreements. The relevant provisions of the Civil Code have been applied, establishing the standard for determining the formatting clauses of consumer extraterritorial agreement jurisdiction, and providing useful reference for the correct judgment of such cases. This case has implemented the principle of consumer tilt protection, and effectively safeguarded the legitimate interests of consumers in cross-border e-commerce disputes by actively exercising China’s jurisdiction. After the judgment of this case was made, the cross-border e-commerce provider involved took the initiative to modify the formatting clauses and accept the jurisdiction of Chinese courts in similar cases, achieving good social effects. This case was listed in China's Top Ten Typical Judicial Cases of Consumers’ Rights Protection in 2022 and as an outstanding case studied by the national court system, and was evaluated as "a case with demonstration effect in the field of the international Internet".

[Case Facts]

The plaintiff Gao X claimed that on November 29, 2019, he placed an order for two items through the “Overseas purchase” section of a Chinese website. After receiving the goods, Gao believed that the goods were not the imported goods claimed by the website, which constituted fraud. Therefore, he sued the website operator, XX Company, to the court, asking for “Repay Purchase Price and Pay Treble Damages” of RMB 2,535.36 in total. The defendant submitted an application for objection to jurisdiction, stating that both parties agreed to submit the corresponding dispute to the jurisdiction of a city court located in Europe and waived other jurisdiction. Therefore, the Chinese court did not have jurisdiction over this case. After trial, the court ascertained that Gao is a Chinese citizen with a habitual residence in China, and the defendant company is an enterprise established and registered in accordance with Chinese laws, with its actual place of business in China. According to the ICP filing information, the domain name of the website involved is a top-level domain name in China. The website’s homepage is marked with the words “Overseas purchase” in the upper left corner, and “Pure overseas goods”, “Direct mail with steep discount”, and “Localized service” in the upper right corner. The content of this website, except for a few product brands, models and other content involving foreign languages, is in Chinese.

[Key Points of Adjudication]

The court’s effective judgment holds that the dispute has occurred during the process of “Overseas purchase”, and according to its “Use conditions of overseas purchase”, the use conditions should be applied first. However, the use conditions expressly state that the user acknowledges ordering goods from an overseas entity and an overseas website, and accordingly chooses a city court located in Europe as the jurisdiction court corresponding to the overseas entity and website. According to the literal meaning, the user has entered into a jurisdictional agreement with an overseas entity, rather than a jurisdictional agreement between the plaintiff and the defendant. In addition, the “Use conditions” at the bottom of the general page of the defendant’s website stipulates that “disputes shall be resolved through litigation by a court with jurisdiction in Beijing”. Therefore, the defendant’s claim that there was an exclusive jurisdiction agreement between the defendant and the plaintiff of Luxembourg city courts is not valid.

Even if the defendant, as it stated, is essentially one of the subjects of the “Use conditions of overseas purchase”, it is still necessary to further consider the validity of the jurisdiction agreement involved. The jurisdiction agreement involved in the case is drafted in advance by the party providing the formatting clauses for reuse and not negotiated with the other party when concluding the contract, and belongs to formatting clauses. The agreement jurisdiction system reflects respect for the autonomy of the parties’ will, and its practical basis is the equal status of both parties. The transaction involved in the case is a “B2C” online retail transaction. Although it is a contract between equal parties, one party to the contract is an operator with a relatively advantageous position, while the other party is a consumer in a disadvantageous position. The information held by both parties is asymmetric, and the actual negotiation ability is also unequal. When determining the validity of such contracts, it is necessary to examine whether they follow the principle of fairness to determine the rights and obligations of the parties, implement the principle of protecting the weak and curb the abuse of the principle of freedom of contract by the dominant party, so as to promote the realization of substantive fairness and justice.

In this case, the clause involved unreasonably limits the consumer’s main rights to seek remedies, and the exclusion of the clause involved does not unreasonably increase the cost of the operator. The commercial activities of the defendant website are clearly directed to Chinese consumers, and it mainly profits from transactions with Chinese consumers. The defendant should have considerable foresight and reasonable consideration of operating cost allocation for transactions with Chinese consumers and response to disputes that may arise therefrom. If that jurisdiction clause is deemed valid, it means that Chinese consumers can only go to foreign courts to seek judicial remedies when there is a dispute over shopping on websites operated in China. This disproportionately increases the cost of consumer rights protection and unreasonably restricts consumers’ right to seek remedies. In summary, the website involved in this case mainly engages in business activities targeting Chinese consumers, but exclusively stipulates that the jurisdiction courts are Luxembourg city courts. When establishing the rights and obligations of both parties to the transaction, it violates the principle of fairness and unreasonably restricts the main rights of consumers. The Plaintiff in this case also clearly stated that he does not agree to accept the agreement, so the jurisdiction clause in this case should be invalid.

[Adjudication Result]

The defendant’s objection to jurisdiction in this case is dismissed.

Case 2

Live Streaming Sales Case: Private Transactions in Live Streaming Sales Should be Recognized as Business Operations Carried Out by the Host 

—— Wang XX v. Xu XX and Beijng XX Technology Company Over Online Shopping Contract Dispute 

[Typical Significance]

This case is referred to by the media as the “first case related to live streaming sales”. The host’s private live streaming sales should be recognized as business operations and the host should bear the responsibility of the operator accordingly. The judgment in this case directly faces the new problems brought by the new business format of live streaming sales, deeply analyzes the essence of various business models in live streaming sales, clarifies the boundaries of the responsibilities and obligations of hosts and platforms, and reflects the basic concept of Internet courts using judgments to establish rules, applying rules to promote governance and exerting governance to improve development.

[Case Facts]

On May 28, 2019, the defendant claimed during a live streaming on a platform that he had an idle second-hand mobile phone for sale and any interested person could add his WeChat ID for contact. The plaintiff contacted the defendant through WeChat on the same day. The defendant claimed that the mobile phone involved was functional and had no invoice. The defendant also took a photo of the “About” page of the mobile phone involved and sent it to the plaintiff upon the plaintiff’s request. The agreed price is RMB 4,000. The mobile phone was delivered by express after the payment was made via WeChat transfer. After signing for it, the plaintiff believed that the phone involved was a counterfeit product with a low benchmark score and its system was not iOS. The plaintiff requested a refund and return, but the defendant later blocked the plaintiff. The plaintiff appealed to the court for an order to terminate the contract and require the defendant to bear the responsibility for refund, compensation of three times the purchase price and reasonable expenses. The defendant claimed that he was not an operator and had no fraudulent intention.

[Key Points of Adjudication]

The party, who continuously engages in the business operations of selling goods through the Internet and other information networks for the purpose of profit, shall be deemed as an operator engaging in business operations. Any change in trading product or trading method in a single transaction shall not affect the nature of the operation. That single transaction shall still be deemed as the business operation of the operator.

The host continuously engages in business operations of selling goods, promotes and introduces specific goods through live streaming platforms, and guides consumers to privately contact and purchase specific goods. If a consumer claims that the relevant operation is fraudulent due to quality issues and demands the host to bear the responsibility for the compensation of three times the purchase price, the people’s court shall support the relevant claim after investigation and verification.

Live streaming platforms only release goods information and do not have service functions for matchmaking trading such as order management. When the host and the purchaser deal directly in private, the live streaming platform shall not be deemed as an e-commerce platform operator, but as a general network service provider.

[Adjudication Result]

The court ruled that the contract entered into by the plaintiff and the defendant should be terminated, and the defendant should refund the purchase price and pay for three times the purchase price as well as reasonable expenses in compensation. Upon the first instance judgment, the parties did not lodge an appeal and the first instance judgment has come into force.

Case 3

Case of Free Offers at Designated Time: Failure of the Operator on the E-Commerce Platform to Fulfill the Contractual Obligations in Accordance with the Rules of Free Offers at Designated Time Constitutes a Breach of Contract 

—— Zhang X v. Zhou X and a Third Party (Zhejiang XX Company) over Online Shopping Contract Dispute 

[Typical Significance]

When operators on e-commerce platforms hold “free offers at designated time” activities and formulate corresponding rules, consumers often encounter rights protection difficulties when they believe they meet these rules but do not enjoy the corresponding discounts. This case clarifies the legal nature of these rules, stating that the rules publicly displayed by operators on the platform in online stores are an integral part of the shopping contract after its establishment and are a conditional agreement to fulfill contractual obligations, which have binding force on both parties. This case clarifies the legal responsibility that the operators on platforms should bear if the operators fail to comply with the rules, and determines that the operators on platforms should bear the responsibility for breach of contract and return the payment. This case has reference significance for the rule-making and dispute resolution of various promotional activities organized by operators on platforms such as limited-time discounts and electronic coupons, similar to “free offers at designated time” activities.

[Case Facts]

In 2017, the defendant held Double Twelve promotion activities in the online store operated by the defendant, and the rule of the activity was the first customers to pay respectively after 00:00, 10:00 and 22:00 on the day would be free of charge. The plaintiff consulted the defendant about the rule before participating in the activity, and the defendant’s customer service staff replied that “Based on payment time”. On December 12, 2017 at 22:00, the plaintiff Zhang X purchased a pair of brand women’s shoes worth RMB 898 from the defendant’s involved online store, and the actual payment was RMB 898. On December 19, the defendant announced the list of customers who could get it for free, and the plaintiff was not in the list. The screenshot provided by the defendant showed that the customer who could get it for free placed the order at 22:00:00 (the defendant believed that according to the background records, multiple people placed orders on the hour, but the customers who could get it for free were in the first place), and the payment was made at 22:00:03. However, the screenshot of the plaintiff’s order showed that the plaintiff took the order at 22:00:00, and the payment was made at 22:00:01. The plaintiff believed that the defendant engaged in fraudulent behavior during the activity and therefore appealed to the court, requesting the defendant to refund the purchase price of RMB 898 pay the compensation of three times the purchase price.

[Key Points of Adjudication]

The court believes that the plaintiff uses his account to purchase the products involved from the store operated by the defendant, pays for the goods and receives the goods, forming an online shopping contract relationship between the two parties. As to the legal nature of the “free offers at designated time” rules formulated by the defendant, the court believes that the plaintiff’s action to occupy a position is based on the completion of the payment, at which time the shopping contract has been established and taken effect. If the plaintiff occupies the first position according to the rule, the defendant must fulfill the obligation of refund. The “free offers at designated time” rules formulated by the defendant should be regarded as an integral part of the shopping contract between both parties and have binding force on both parties. The agreement of the “free offers at designated time” belongs to the clause of conditional performance of contractual obligations. Regarding these rules, the court believes that based on the screenshot of the activity rules in the online store that the plaintiff got before participating in, there is no indication specifying it is based on the order time or payment time. After consulting the defendant’s customer service, the plaintiff learns that it is “based on payment time”. The court determines that the rule involved should be whoever places the order on the hour and pays first can be the one to get it for free. Regarding the legal liability of the defendant, the court believes that in the case of the plaintiff’s payment time being earlier, the defendant’s failure to determine the plaintiff as the one to get it for free in accordance with the rules constitutes a breach of contract. However, based on the existing evidence submitted by the plaintiff, it is insufficient to prove that the defendant’s behavior is fraudulent, so the claim of the compensation of three times the purchase price is not supported.

[Adjudication Result]

The defendant has refunded the plaintiff the purchase price of RMB 898.

Case 4

Case of Consumers’ Negative Comments to the Operator: Consumers’ “Negative Comments” to the Operator Generally Does Not Constitute Any Infringement to the Operator’s Reputation Right 

—— XX Sports Company v. Shanghai XX Information Consulting Company over Reputation Right Infringement Dispute 

[Typical Significance]

This case is a vivid practice of effectively safeguarding consumers’ right to criticism and suggestion. Clearly, it is consumers’ legitimate rights to make an objective evaluation on the network platform towards the operator’s commodities or services. It infringes the operator’s reputation right only when their evaluation slanders and damages the reputation of the operator. Consumers should reasonably and legally use their consumption supervision rights to force operators to continuously improve their services and enhance their quality.

[Case Facts]

The plaintiff, a sports company, operates an indoor sports venue and has registered online on the review platform operated by the defendant, an information consulting company in Shanghai. Shortly after the new store opened, the plaintiff found several negative comments on the defendant’s review platform. The plaintiff believed that the negative comments were inconsistent with the actual situation and infringed its reputation right. The plaintiff requested the defendant to delete the negative comments and disclose the personal information of users who wrote the “negative comments”. The defendant refused on the grounds that it had no right to do so, and the plaintiff then appealed to the court.

[Key Points of Adjudication]

Whether the four reviews involved in the defendant’s platform infringe the plaintiff’s reputation right and whether the defendant infringes the plaintiff’s reputation right.

The court holds that speech includes statements of fact and expressions of opinion. The statement of fact refers to a specific process or state of the present or past, with the nature of being able to verify its authenticity. It specifically refers to the concept of “what” relative to the fact and can be broadly referred to as an opinion. The expression of opinion refers to the actor expressing own opinions or positions, whether it is a pure value judgment or a simple expression of opinion, and whether it is true or false. It specifically refers to “how to see it”. To determine whether speech infringes the reputation right, for the statements of fact, the actors need to provide evidence to prove that their statements are true, or after reasonable investigation, there are substantial reasons to believe that the statements are true. For the expressions of opinion, whether the opinions are correct or not is not within the scope of legal evaluation, but there should be no insults to others. In this case, the four reviews on the defendant’s platform are reviews on the services provided by the plaintiff. According to the content of the reviews, they are subjective evaluations made by users on the services provided by the plaintiff. Article 15 and Article 17 of the Law of the People’s Republic of China on the Protection of Consumer Rights and Interests, as well as Article 39 of the E-Commerce Law, stipulate that consumers shall have the right to supervise the protection of consumers’ rights and interests in work related to commodities and services. A business operator shall listen to and take account of suggestions regarding commodities and services provided by consumers and shall be subject to supervision by them. An operator of an e-commerce platform shall create and improve its credit rating system, formulate public credit rating rules, and provide avenues to consumers to make comments on commodities sold or services provided on its platform. The operator of an e-commerce platform shall not delete any comment made by consumers on any commodity sold or service provided on its platform. According to laws above, it is consumers’ legitimate rights to make an objective evaluation on the network platform towards the operator’s commodities or services. Only when their evaluation slanders and damages the reputation of the operator can we determine it infringes the operator’s reputation right. The e-commerce platform shall not delete any comment made by consumers that complies with mandatory provisions of the law, social public order and good customs, and is not in violation of credit evaluation rules of the e-commerce platform. In this case, it can be seen from the evidence on record that the user comments on the defendant’s platform are based on the defendant’s service itself and other factors. Such comments indicate users’ subjective feelings and personal experiences, and aim at the specialization level of the plaintiff’s coaches, without directly pointing to the plaintiff. Although some comments have extreme remarks like “liar”, the overall comments are not to the extent of insult and slander. As an operator, the plaintiff shall give necessary tolerance to comments made by consumers on commodities, instead of demanding absolutely accurate comments without subjective emotion and asking each buyer to make good comments. In addition, the court notes that in these four comments the plaintiff claims, the plaintiff also gives an explanation, and the defendant has already processed extreme remarks in relevant comments. In this case, the plaintiff also fails to present evidence proving user comments bring damage, and shall bear the adverse consequence of inability to provide evidence. Accordingly, the plaintiff claims that user comments on the defendant’s platform and the defendant infringe its reputation right, which lacks factual and legal basis. It also files a claim to delete such comments and make compensations, including RMB 20,000 for economic losses, RMB 1,230 for notarial fees, and RMB 5,000 for legal expenses. The court will not support this claim. Similarly, the claim filed by the plaintiff to ask the defendant to offer an apology also lacks factual and legal basis. The court will not support this claim.

Whether the defendant should disclose to the plaintiff the information on users who make four comments.

Article 3 in the Regulations of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trail of Civil Dispute Cases Involving Infringement of Personal Rights by the Information Network (Amendment in 2020), “If the plaintiff prosecutes the network service provider, and the network service provider defends on the grounds that the information on the alleged infringement is released by the user, according to the plaintiff’s request and the case, the people’s court may order the network service provider to provide the information that can determine network users suspected of infringement, like name, contact information and network address”. Since the related comments complained by the plaintiff in this case do not constitute the infringement of its reputation right, the court will not support the plaintiff’s claim for disclosing the information of concerned users.

Whether the defendant should restore two comments in the “All” column of the plaintiff’s store to the “Select” column

According to Article 39 of the E-commerce Law of the People’s Republic of China, “An operator of an e-commerce platform shall create and improve its credit rating system, formulate public credit rating rules, and provide avenues to consumers to make comments on commodities sold or services provided on its platform. The operator of an e-commerce platform shall not delete any comment made by consumers on any commodity sold or service provided on its platform.” This shows that consumers are vested with the evaluation right to solve the problem of asymmetric information. It is the duty of the operator of an e-commerce platform vested by laws to provide reference for consumers in shopping decision-making, the establishment of evaluation mechanism, and evaluation content display. The establishment of evaluation mechanism is not within the scope of the civil relation caused between equal subjects due to the contract. In this case, the plaintiff claims that the defendant moves the comments from the “Select” column on the platform to “All” column, infringing its rights and interests. The court holds that this is a way for the platform to display its evaluation rules, and does not infringe the plaintiff’s rights and interests. Therefore, the court will not support the plaintiff’s claim.

[Result]

The plaintiff’s claim is dismissed by the court judgment.

Case 5

Case of Take-Away Package Price Higher Than Single-Order Price: That Preferential Package Price Is Higher Than Single-Order Price Constitutes Fraud 

—— Zhou X v. XX Company on Network Service Contract Dispute 

[Typical Significance]

This case finds that during the transaction, commodities and services shall be advertised in the principle of honesty and credibility, and consumers shall also be notified truthfully and clearly of promotional means like discounts and gifts, instead of exaggerating the preferential strength and misleading consumers by means of spurious calculations, which constitutes false advertising. The verdict of this case delivers a judicial attitude of protecting the legitimate rights and interests of online consumers and saying “no” to fraudulent acts of concealment.

[Case Facts]

The plaintiff purchased a package in the store owned by the defendant through the take-away platform. The webpage showed “Original price is RMB 108 while current price is RMB 65”. This package also included a limited edition coke as a gift, of which, however, the price was not marked. After the plaintiff purchased the package, the price of all items in the package was RMB 85 in total, and only cost RMB 57 after discounts. The plaintiff held that for the same combined commodity, the package price was higher than the single-order price, so the defendant’s act is fraud. The court is requested to order the defendant to compensate RMB 1.

[Key Points of Adjudication]

The court holds that since the plaintiff purchases the package involved from the store run by the defendant on the food ordering platform, the parties establish a contractual relationship. The plaintiff claims that the defendant and the third person are fraudulent in selling the package involved. The court holds that the so-called fraud is that false information is notified to the other party or truth is concealed deliberately, causing the other party to act based on declaration of intention. Fraud is determined by the following factors: deliberation, notification of false information, or truth concealment, causing the other party’s wrong cognition and making declaration of intention based on such wrong cognition. According to the evidence provided by the plaintiff, the price of package involved is marked as RMB 108. However, even without any discounts, the total price of all products in the package purchased separately is only RMB 85, which is far less than the marked package price. In this case, the defendant doesn’t provide any evidence proving the price of this limited edition coke is RMB 23. Even without considering this, in the usual sense, now that it is marked as a gift, the gift price should not be calculated into the total price of the commodity, misleading consumers to think they enjoy both discount and gift. Therefore, the price of the involved package advertised by the defendant is false advertising, misleading the plaintiff. Compensation should be made.

The third person, as the network transaction platform, publicizes the defendant’s business license, food business license, and address, and fulfills its examination duty. In this case, the plaintiff doesn’t provide any evidence proving that the third person should know or is aware of the defendant’s false advertising. Therefore, the court will not support the plaintiff’s claim, asking the third person to bear joint liability. Moreover, regardless of any claims of the plaintiff in this case lodged in other cases, in this case, the plaintiff only claims only RMB 1, without any malicious action. For this opinion proposed by the third person, the court will not support.

[Result]

The verdict of the court supports the plaintiff’s claim. After the first instance judgment, the parties do not appeal and the judgment has come into force.

Case 6

Case of Taking Advantage of a Loophole: Insincere Conclusion of Contracts by Taking Advantage of the Website Information Aggregation Error Shall Not Be Protected by the Law on the Protection of Rights and Interests of Consumers 

—— Chen XX v. Beijing XX Information Technology Company over Network Service Contract Dispute 

[Typical Significance]

This case positively responds to malicious “taking advantage of a loophole”. The plaintiff maliciously claims for profit by taking advantage of error information on the website, which should not be protected by the law on the protection of rights and interests of consumers. Such hostility complaint and prosecution severely interfere with the normal operation of the enterprise, which complies with neither the principle of honesty and credibility nor the core socialist values, and also waste precious judicial resources. It should be contained resolutely.

[Case Facts]

On March 20, 2019, the information on products of XX Hong Kong Hotel provided by the operator on the platform was wrongly aggregated on the website operated by Beijing XX Information Technology Company. The information on “Luxury Room” of this product was displayed on the reservation homepage of “Luxury Executive Suite with Mountain View”. However, the order filling page and the order detail page showed “Luxury Room” information, that is to say, after the user clicked “Luxury Executive Suite with Mountain View” displayed on the homepage and entered the order filling page of the product provided by the operator on the platform, the displayed information and the reservation were “Luxury Room”, and payment made was also the price of “Luxury Room”. On that day, the plaintiff submitted 3 orders, booking for 3 nights on March 31, April 2, and April 4, 2019 respectively, and paid RMB 9,757 in total. After around one hour upon placing the order, the plaintiff called the customer service of the website, complaining the reserved room type is not the one provided, and claiming that the information technology company induced consumers by fraud and induced graphic text, which violated the law on the protection of rights and interests of consumers. The plaintiff requested the information technology company to return the hotel deposit and pay triple punitive damages.

[Key Points of Adjudication]

Beijing XX Information Technology Company is not deliberate, which is one of factors determining fraud, so it commits no fraud.

In this case, it can be seen from the evidence submitted by the parties that the information aggregation error of hotel product involved is sure-enough, and such error indeed attracts consumers at a lower price. However, this error could be caused purposely, or caused by technical fault or maloperation. If it is to be determined that the information technology company commits fraud deliberately, other reasons should be eliminated reasonably. From a realistic perspective, at the reservation homepage of “Luxury Executive Suite with Mountain View” on the website, the product price of the company is quite different from the price of other suppliers. Also, after one clicks it and enters the page, all operations are at the reservation page of “Luxury Room”. The information aggregation error is obvious. In the network environment, the operator’s such error causes larger harm than benefit, or even harm without benefit. The more orders such error attracts, the more complaints and claims the operator will face, and the more losses the operator will bear. Therefore, the information aggregation error of the product involved is more likely caused by technical fault or maloperation, not by human intention. This is not determined as fraud.

Chen XX does not misunderstand due to the error information display and make declaration of intention based on wrong judgment.

According to ascertained facts, Chen has filed claims against the defendant many times, and obtained high compensation. In this case, Chen’s acts are not reasonable. First of all, Chen submitted 3 orders, booking for 3 nights on March 31, April 2, and April 4, 2019 respectively, with an interval of one day. The court inquired the reason for reservation with an interval. Chen explained the other two nights were booked at the official website of the hotel. The court ordered Chen to submit the order details, but Chen failed to provide such information until now. Secondly, after complaining the reservation inconsistent with the real situation, during the coordination process by the information technology company, Chen canceled the reservation and held the website accountable for fraud. Moreover, after the information technology company provided a solution (making up the price difference and upgrading the room), Chen contacted the hotel to verify the bed type of “Luxury Executive Suite with Mountain View”. Subsequently, Chen claimed the website cheated consumers on the grounds that the bed type information displayed on the website and notified by the customer service was false.

In fact, Chen didn’t make requests towards the bed type in the order, so no agreement on the bed type was made in the contract. When confirming the order information to the customer service, Chen didn’t raise an objection towards the bed type. That is to say, Chen’s final order had nothing to do with the bed type provided for “Luxury Executive Suite with Mountain View” of the hotel involved. It can be inferred from Chen’s performance that Chen actually had no demand for accommodation while placing the order, the declaration of intention was mendacious, and Chen intended to claim for profit by taking advantage of error information on the website.

[Result]

All claims of the plaintiff were dismissed by the court judgment.

Case 7

Case of Paying at the Store While Withholding Expenses: Exceptions of Certain Content in Which Consumers Have Personal Stake in Network Consumption Formatting Clauses Should Be Prominently Indicated  

—— Wu X v. Beijing XX Company over Network Service Contract Dispute 

[Typical Significance]

The hotel reservation service company serve users by the convenience and efficiency of formatting clauses, and also makes unfair transactions with users by taking advantage of fixed contents in formatting clauses provided by one party. The enterprise providing formatting clauses shall establish formatting clauses legally and reasonably based on the principles of fairness and integrity and with protecting consumers’ interests as starting point, like clauses with a material relation with consumers, such as method of performance. The verdict of this case further clarifies the responsibility of the network service provider as a party providing formatting clauses, namely guiding the network transaction mode to be more consistent with the spirit of contract freedom and contract justice, avoiding risks while facilitating transactions by formatting clauses, and giving long-term play to such clauses.

[Case Facts]

Wu X reserved an overseas guest room on a tourism APP run by a company. The payment mode was “payment at the store”, but after placing the order, the payment has been deducted from the bank card, then the plaintiff didn’t check in. The plaintiff held that the payment should be made at the hotel. Since this company violated the agreement, Wu requested to cancel the order. This company held that in terms of “payment at the store”, it has already added remarks in service clauses, i.e. “some hotels may collect reservation fees from your band card in advance”. Therefore, this didn’t constitute a violation and the hotel refused to return the refund. Wu sued the company to the court and requested for an order to refund the withheld house payment.

[Key Points of Adjudication]

Is the company the contract subject of hotel reservation service involved?

Is the company the contract subject of hotel reservation service involved? The screenshot of the order submitted by Wu is clearly marked with XXX. com in the upper left corner, and the evidence submitted by the company also shows that “online reservation services are provided through the website provided by XXX”, so it can be concluded that the hotel reservation service involved is provided by XXX. com website. The company argues that the website is different from the App, but it has not submitted evidence to prove that the operation on the App is conducted through other websites and has nothing to do with XXX. com, so its claim is not accepted. The company argued that it was not the operator of App, and the court held that even if it was not the operator of App, it could not be concluded that it was not the other party to the contract. The unilateral statement of the company in the terms of service that “the website of XXX. com belongs only to the Singapore office where it is registered, not to the offices of any global customer service agencies” does not conform to its website registration information in China and will not be accepted. The filed evidence is sufficient to prove that the contract involved was completed through XXX. com website, and the company, as the online filing subject of the website in China, should be identified as the provider of the hotel reservation service involved, that is, the other party of the service contract.

Should the company bear the liability for compensation claimed by Wu?

Should the company bear the liability for compensation claimed by Wu? The screenshot of the price details submitted by Wu clearly shows “Pay CHF 1053 at the store”. According to the general understanding, in this order, 1,053 Swiss francs should be paid to the hotel after Wu arrived at the store, but the actual situation is that after Wu placed the order, he was deducted 1,106.70 US dollars. The “terms of service” involved in this case are drafted in advance for reuse and not negotiated with the other party when concluding the contract, and belong to formatting clauses. The company, as a provider of foreign-related hotel reservation services, has the obligation to inform Wu of the contents that bear significant interests with users, such as payment time, currency and whether the reservation can be cancelled. The following content is added to the clause of “Pay at the Store” with very clear meaning: “In this case, some hotel accommodation service may request pre-authorization of your bank card to collect a deposit or charge a full reservation fee in advance”. For this statement, the court believes that it should be regarded as an exception to “Pay at the Store”, that is, it is usually paid on the spot when the user checks in the hotel, and there may be other exceptions of prepayment and withholding. For such possible exceptions, the company, as a provider of formatting clauses, has the obligation to remind and explain the clauses to users. However, they are in fact only stipulated in the complicated and varied service terms, which is not enough to serve reminding purpose. Therefore, the company failed to fulfill its reasonable reminding obligation in the reservation service involved in this case. So it does not constitute what we usually understand as “Pay at the Store”, which misled Wu to believe that he could make a reservation with the hotel first and complete payment after he arrived at the hotel. In addition, the company should be liable for the loss of RMB 7,000 of reservation payment caused by the failure to cancel the order. Wu’ s claim for another compensation of RMB 7,000 has no factual and legal basis, which is not supported by the court.

[Adjudication Result]

The court supports Wu’s claim to refund the hotel reservation payment.

Case 8

Case of Calculation of Expiration Time of Premium Account Members: The Act of Ending the Membership Service Early without Covering All the Natural Days Constitutes a Breach of Contract 

——Shi X v. XX Technology Company over Network Service Contract Dispute 

[Typical Significance]

The verdict in this case urges the platform to clarify the rights and content of member users, prompting the platform to further provide more user-friendly services, and safeguarding consumers’ right to know.

[Case Facts]

At 20:46:48 on June 9, 2021, the plaintiff Shi X activated a one month VIP membership service on a video platform operated by a technology company. At 23:28 on July 9, 2021, when Shi intended to use the membership rights, he was informed that his membership rights had expired and could not be used. Shi believes that there is a network service contract relationship between himself and the defendant, a technology company. According to the VIP Member Service Agreement and the member term instructions on the defendant’s official website, there is ground to believe that the expiration date of the member’s rights is 24:00 on July 9, 2021. The technology company unilaterally terminated the contract in advance, which constituted a breach of contract. Therefore, Shi sued the defendant, a technology company, to the court.

[Key Points of Adjudication]

Are the corresponding terms of the service agreement for members involved in this case valid?

The VIP Member Service Agreement involved in this case is a clause drafted by the defendant in advance and used repeatedly for many VIP members. VIP members can only accept or refuse the agreement and cannot negotiate with the defendant, so the agreement is a formatting clause. The contents of the clauses involved are valid, and the defendant shall provide services to the plaintiff in accordance with the agreed membership service term.

Does the act of the defendant constitute a breach of contract?

The VIP Member Service Agreement involved stipulates that “the term of your VIP member service shall be subject to the service term corresponding to your own choice and payment of the corresponding membership fee, starting from the time you become a VIP member ...The service term of VIP member shall be terminated from the date when the current service term expires.” The instructions on defendant’s official website about the validity term of membership is as follows: “The validity term of a member who subscribes for one-month service starts from the date on which the member subscribes the membership service and ends on the same date next month (for example, if the membership service is subscribed on July 28, the validity term will start from July 28 and end on August 28).” The focus of the dispute between the two parties is whether the membership service should end at 20: 46: 48 on July 9, 2021 or at 24: 00 on that day.

The court holds that membership rights should fully cover the period up to that natural day. First of all, the unit of calculation for the expiration of the service term in the corresponding clauses of the membership service agreement involved is in “days”. According to the general understanding, a “day” should cover all the time of that natural day. Secondly, the membership service agreement involved is a formatting clause, so when there are two interpretations, it should be understood in favor of the provider of non-formatting clause. In addition, the defendant’s instructions on the validity term of membership in the “Help Center” on its website, although not included in the membership service agreement involved, has the effect of explaining the corresponding formatting clause. As the reminder of “expiration time” can only be viewed after the user recharges and becomes a member, it cannot be regarded as the content of which the user has been clearly informed before the contract is established. To sum up, the defendant’s early termination of provision of membership services to the plaintiff constitutes a breach of contract and the defendant should bear the corresponding liability thereof.

[Adjudication Result]

The court ordered the defendant, a technology company, to provide VIP membership rights to the account of the plaintiff, Shi, for one day, and rejected the rest of the claims by the plaintiff. At present, this verdict has come into effect.

Case 9

Case of Qualification Audit on a Take-Away Platform: The Take-Away Platform Should Bear Joint Liability for Failing to Audit the Qualification of Catering Service Provider 

——Wang X v. XX Catering Management Company and XX Information Technology Company over Product Liability Dispute 

[Typical Significance]

Against the background of digital economy, the Internet platform should fulfill its main responsibilities according to law, especially the take-away catering platform involving the health of consumers, and should strengthen the audit of the identity and business license of catering service providers on the platform. It is clarified in the verdict of this case that if the operator of a take-away catering platform fails to fulfill its qualification audit obligation according to law, resulting in damage to the legitimate rights and interests of consumers, it shall bear joint and several liability for compensation to prevent the health and physical safety of the public from being infringed.

[Case Facts]

The defendant, an information technology company, operates a take-away catering platform, providing take-away ordering service. It solemnly promises to consumers that the platform has carried out strict on-the-spot examination on the food business license of catering service providers, and that it ensures that the license information such as the operator’s name, business place, main business format, business items, and expiration date stated in the food business license of catering service providers are legal, true, accurate and valid. The plaintiff Wang X bought some spicy hotchpotch from a store on the platform, and later found that the food store on the platform was operating without food business license. Wang appealed to the court, demanding that the information technology company and the spicy hotchpotch store bear joint and several liability for compensation.

[Key Points of Adjudication]

Operators of e-commerce platforms shall require operators who apply to enter the platform to sell goods or provide services to submit their identity, address, contact information, administrative license and other authenticated information for verification and registration. If the e-commerce platform fails to fulfill its qualification audit obligations and causes damage to the legitimate rights and interests of consumers, it shall bear corresponding legal responsibilities.

[Adjudication Result]

The court ordered the information technology company and the food operator to bear joint and several liability for compensation.

Case 10

Case of Dispute over Liability of Second-Hand Commodity Operators: Sellers Bear the Responsibility as an Operator When Continuously Selling Second-Hand Commodities for Profit 

——Wang X v. Chen X over Online Shopping Contract Dispute 

[Typical Significance]

The second-hand goods trading model is a typical model in the digital economy. The emergence of second-hand goods trading platforms is conducive to the revitalization and reuse of second-hand goods. However, in practice, some people engage in business activities on second-hand trading platforms under the guise of second-hand trading, and refuse to bear the responsibility as an operator over dispute regarding the goods it sells on the grounds of transaction of second-hand items for personal use. The verdict in this case takes into account the nature, source, quantity, price, frequency, and income of the goods sold by the seller, and holds that the seller who continuously sells second-hand goods for profit should bear the responsibility as an operator, which is conducive to better safeguarding the legitimate rights and interests of consumers and has reference significance for the handling of similar cases.

[Case Facts]

In September 2019, the plaintiff Wang X placed an order for a certain brand of laptop from Chen X, the defendant, on a second-hand trading platform for study purposes. Upon receipt, it was found that the appearance of the laptop was severely worn and could not be charged and used properly. Upon inspection by the official after-sales division of the brand, it was found that the internal battery of the computer was swollen, the computer was subject to unauthorized tampering and contained non-original components, which were clearly inconsistent with what Chen claimed as 95% new. Wang contacted Chen for a return and refund, which was rejected. Wang believed that Chen’s act constituted fraud and appealed to the court to request a refund from Chen and compensation at three times the price. Chen argued that his handling of self-used second-hand items on second-hand platforms does not fall under the category of operators under the consumer rights protection law.

[Key Points of Adjudication]

Did the defendant Chen X engage in business activities under the identity of an operator?

Article 3 of the Consumer Rights Protection Law stipulates that business operators who provide consumers with goods or services they produce or sell shall comply with this Law. If there are no related provisions in this Law, it shall comply with other relevant laws and regulations. The concept of operator is not clearly defined in this Law. However, according to Article 9, Paragraph 1 of the E-commerce Law of the People’s Republic of China (hereinafter referred to as the E-commerce Law), the term “e-commerce operator” referred therein refers to natural persons, legal persons, and unincorporated organizations engaged in business activities such as selling goods or providing services through information networks such as the Internet. By comparing the above provisions, both laws stipulate that entities must have the element of selling goods or providing services to be defined as operators. Besides, the E-commerce Law specifically limits the channel for selling goods or providing services within the range of information networks. This indicates that the E-commerce Law has refined regulations based on the particularity of information networks, relying on the provisions of Consumer Rights Protection Law. If the defendant Chen is identified as an e-commerce operator due to selling goods on the information network, he should also be identified as an operator regulated by the Consumer Rights Protection Law and bear corresponding legal responsibilities.

Before the establishment of this online shopping contract, the defendant Chen had previously posted multiple sales information related to different models of Apple computers through his second-hand platform account, which clearly exceeded the scope of trading second-hand items for personal use. Chen had a clear subjective intention to continuously sell goods to the public for profit, with attributes similar to the usual e-commerce platform operators. Therefore, the court holds that the defendant Chen has the identity of an e-commerce operator, and his business activities of selling the computers involved in this case through the internet shall be recognized as a business behavior.

Does the defendant’s act of selling computers constitute an act of fraud?

Where one of the parties notifies the other party the fake information or conceals the truth intentionally, causing the other party to make wrong decisions, it shall be deemed a fraud. Therefore, an act of fraud shall meet the following requirements: 1. The perpetrator intentionally provides false information or conceals facts; 2. This leads the other party to form a misconception; 3. The other party marks an incorrect expression of intention as a result. In this case, the defendant traded a second-hand computer within a certain second-hand App. When both parties communicated through the second-hand App, the plaintiff reaffirmed that the appearance of the computer in question was intact, undamaged, was subject to 80 charging cycles, and was bought from the official website. This led the customer to make the purchase decision. It is clear that the plaintiff and the defendant based the transaction on the prerequisite that the computer in question was a genuine product. According to the obvious scratches on the appearance of the involved computer and the documents provided by Apple’s official store, it was confirmed that the internal solid-state drive of the involved computer was not an original component, there were official signs of tampering and modification on the device, and the battery inside the device was swollen. This proves that the computer in question is not the second-hand genuine Apple product that the plaintiff Wang intended to purchase. Meanwhile, the defendant Chen stated that his computer in question had only been charged and discharged about 80 times, and claimed that all functions of the computer in question were normal in operation. Based on common sense, the defendant should have adequate awareness of the appearance and actual usage of the computer in question. Generally, charging and discharging about 80 times would not have caused the battery to swell, nor would it cause the replacement with non-original hard drive components. If the defendant Chen has indeed used the computer involved in this case, he should have some awareness of the above situation; while the defendant Chen clearly informed the plaintiff Wang during the transaction process that the appearance of the computer in question is normal and there are no problems with its functionality. Therefore, we have grounds to believe that the defendant Chen concealed the facts and informed the plaintiff Wang of the false situation, causing the plaintiff to form a misunderstanding that what he purchased was a genuine product, thus paying the corresponding price. The above-mentioned behavior of the defendant Chen constitutes an act of fraud.

[Adjudication Result]

The court ruled that Chen shall refund and pay three times the price of the goods in compensation.