Beijing Internet Court Data Algorithm Top Ten Typical Cases
Beijing Internet Court
Top Ten Typical Cases
Secret Traffic Inflating Case: Contracts Concluded for Secret Traffic Inflating Transactions Shall Be Invalid
—— Chang X v. Xu X and Third Person Ma X over Network Service Contract Dispute
This is the first case of “secret traffic inflating” transaction in China. The judgment of this case has made it clear that contracts concluded for the purpose of “secret traffic inflating” transactions, having violated public order and good morals and damaged the public interest of the society, shall be invalid. Neither party shall make profits based on the “secret traffic inflating” contract. Both parties lost the case but accepted the judgment, creating a good social effect. Chang’anjian, the WeChat official account of the Political and Legal Affairs Commission of the CPC Central Committee, commented on the judgment, saying that “every word in the judgment has manifested the court’s courage in shouldering social responsibilities”. The case was written into the work report of the Supreme People’s Court (SPC) in that year and selected as one of the Ten Major Civil Administrative Cases of the (SPC), one of the cases of upholding socialist core values of the SPC, one of the cases of the application of new rules of the Civil Code of the SPC, and an outstanding case studied by the national court system.
On September 15, 2017, the plaintiff and the defendant reached an agreement on secret traffic inflating: code: http://mac.iguzi.cn/az_gz6.js; settlement method: weekly settlement; unit price: RMB 0.9/1000 UV; settlement based on backend statistical data on CNZZ, the third party appointed by the defendant. During the performance of the contract, the two parties made three settlements, with the service fee of a total of RMB 16,130 paid. A total traffic volume of 27,948,476 UV was delivered in the last round of traffic delivery according to the statistics, for which the settlement amount should be RMB 30,743 as per the contract. The plaintiff urged the defendant to settle the payment, but the defendant thought that the traffic was false and only agreed to pay RMB 16,293. The plaintiff requested the court to order the defendant to pay the service fee of RMB 30,743 and associated interest. The defendant argued that the contract should be invalid because the “secret traffic inflating” service provided by the plaintiff violated prohibitive provisions of the law, and thus the plaintiff had no right to demand the payment of the consideration.
[Key Points of Adjudication]
Is the “secret traffic inflating” contract valid?
The act of “secret traffic inflating” is an act of fraudulent clicking. Aimed at seeking improper gains and showing disregard for the fair competition environment in the market and the interests of network users, this act has crossed the bottom line of business ethics and violated the public order and good morals. The act not only impairs the value of honest work of competitors in the same trade, undermines the fair market competition order, and infringes the interests of unspecific market competitors, but also would deceive and mislead network users to choose network products not meeting their expectations. In the long run, it would lead to the adverse consequence of “bad money driving out good” in the network market, eventually doing great damage to the interests of the network users. Thus, it is also an act of infringing on the interests of unspecific network users. Therefore, the “secret traffic inflating” contract concluded between the two parties violated public order and good morals and damaged the public interest of the society, and shall thus be invalid.
Legal consequence of invalidation of the “secret traffic inflating” contract
The consequence of the invalidation of the contract is that the contract should be invalid from the beginning, and neither party should obtain the expected contractual benefits based on the act of meeting of minds. When the false traffic has already been generated, ordering mutual return of property would be tantamount to condoning the parties to benefit from illegal acts, which violates the basic legal principle that no one can benefit from illegal acts. Therefore, the court made a separate decision to confiscate the gains made by the plaintiff and the defendant during the performance of the contract.
In the judgment, the claims of the plaintiff were dismissed.
Mobile Reading App Case: Sharing User Data Between Related Products Shall Have Effective Consent
—— Huang X v. XX Technology (Shenzhen) Company over Personal Information and Privacy Infringement Dispute
This is the first typical case in China over the infringement of user’s rights and interests to personal information by a mobile reading app. The adjudication of this case took place when the Civil Code had been promulgated but not yet implemented and the Personal Information Protection Law was being formulated. The laws prevailing at that time explicitly prescribed that the collection and use of personal information should follow the principles of legality, justifiability and necessity and have the consent of users. However, clearer and more specific provisions were lacking on how to apply the principles of legality, justifiability and necessity in practice and on how to define “effective consent of users has been obtained”. The adjudication of this case, having offered an explicit reply to these questions, could provide practical experience for the adjudication of similar cases in the future. The adjudication is also in line with the legal spirit and relevant provisions of the Personal Information Protection Law promulgated later, which has provided a useful reference and valuable practical material for the accurate application of personal information protection provisions in the Civil Code and related laws in judicial practice. The case was included in the work report made by the Supreme People’s Court at the Fourth Session of the 13th National People’s Congress and selected as one of the Ten Major Typical Judicial Cases over Consumer Rights Protection in 2019-2020 based on evaluation by consumers in China.
When logging in to a reading app with a social media account, the plaintiff Huang X found that a large number of the plaintiff’s social media friends appeared in the pages of “Following” and “Followed” in the reading app even though the plaintiff did not conduct any “following” operations. In addition, whether or not the following relationship was added to the reading app, the plaintiff and the social media friends thereof who also use the reading app could check each other’s bookshelves, books they were reading, reading thoughts and so on. The plaintiff believed that the above acts of the operators of the reading app and the social media app infringed the plaintiff’s rights and interests to personal information and right to privacy, and that Shenzhen XX Computer Company, as the developer and operator of the reading app and the social media app, should bear the corresponding tort liability. The plaintiff thus requested the court to order Shenzhen XX Computer Company to stop its infringing act, remove the following relationships in the reading app, delete the friends data, stop displaying reading records etc., and to require XX Technology (Shenzhen) Company, XX Technology (Beijing) Company (the three defendants collectively referred to as XX Company) to make an apology to the plaintiff.
XX Company held that the reading app did not automatically add friends for the plaintiff, and that obtaining the friend relationship data of the plaintiff in the social media app and displaying reading information to the social media friends of the plaintiff who also use the reading APP, as having been stipulated in the user agreement, had been authorized and consented by the plaintiff.
[Key Points of Adjudication]
Personal information shall be determined by comprehensively considering the paths of identification and correlation
The core feature of personal information is “identifiability”, which includes both the identification of individual identity and the identification of personal features. In determining whether a piece of information belongs to personal information, two paths shall be considered. The first is identification, i.e., the path from information to individual that allows the identification of a specific natural person based on the particularity of the information itself; meanwhile, the information used to identify an individual can be a single piece of information or a combination of information. Identifiability needs to be determined from the perspective of information characteristics and information processors in combination with specific scenarios. The second is correlation, i.e., the path from individual to information: if a specific natural person is identified, the information generated in the activities of that specific natural person is personal information. Any information that falls in one of the above two circumstances shall be determined as personal information. As the OPEN_ID is the identification code that Shenzhen XX Computer Company assigns to users, the gender, age and OPEN_ID information obtained by the reading app constitutes identifying information; on the basis of these information that can be used to identify natural persons, related information including friends list, reading information and others also constitutes personal information.
Personal information and privacy shall be reasonably distinguished
Personal information has some overlaps with the private information—the object of the right to privacy, but is different from the latter. Both the right to privacy and the rights and interests to personal information reflect the protection of human dignity and value of personal freedom, but the right to privacy is an absolute right with a passive and defensive nature and is more strictly protected, while rights and interests to personal information include both mental interests and property interests and lay more emphasis on the autonomous use by the subject of the information. For personal information expected to be both defensive and actively used, whether it constitutes privacy shall be comprehensively determined by considering the type of information, whether the content is private, how the information is processed, and reasonable personal expectations. On Internet reading platforms with certain attributes of social media, reading information should not be generally included in the category of private information. In this case, the specific reading information claimed by the plaintiff has not yet met the criteria of privacy, and the claims of the plaintiff can still be realized to protect the plaintiff’s legitimate rights and interests, by determining that the personal information of the plaintiff is infringed, so Shenzhen XX Computer Company did not commit an infringement of the plaintiff’s right to privacy.
Network operators shall inform users and have the consent thereof at the same time to provide their personal information to related products
The Network Security Law made it clear that the collection and use of personal information by network operators shall conform to the principles of legality, justifiability and necessity and have the consent of the subject of the collected information. Being informed and giving consent not only mean that the subject of the information is informed of the types of information collected but also mean that it is informed of and consents to the purpose, method and scope of collection and use, which shall be full, voluntary and explicit. Through this case, the court has further put forward the “transparency” standard of informed consent in information processing, i.e., the extent to which the information subject is aware of, and independently decides to consent to, the processing method and purpose under reasonable expectation: the informed consent should be full, voluntary and explicit, which is also consistent with the principle of personal information processing prescribed in the Personal Information Protection Law promulgated later that “processors of personal information shall inform individuals of authentic, accurate and complete information in a notable way and in a clear and understandable language”.
The court held that although both the social media app and the reading app were operated by Shenzhen XX Computer Company, the same information processor shall, when sharing personal information in related products, have the voluntary and explicit consent of the subject of the personal information to this processing method, on the premise of the subject being fully informed. Meanwhile, as the reading information may include information that the user didn’t want to disclose to others, and the way Shenzhen XX Computer Company processed the reading information had a great impact on the user’s personality rights and interests, it cannot be concluded that Shenzhen XX Computer Company fully fulfilled its obligation of informing the user and obtaining the consent thereof only on the ground that the user had generally agreed to the user agreement.
The defendant, Shenzhen XX Computer Company, shall stop the collection and use of the plaintiff Huang X’s social media friends list information by the reading app, delete the social media friends list information retained in the reading app, cancel Huang’s following of the social media friends thereof in the reading app, cancel Huang’s social media friends’ following of Huang in the reading app, and stop the act of displaying the information generated from Huang’s use of the reading app to Huang’s social media friends who also use the reading app; XX Technology (Shenzhen) Company shall make an apology to the plaintiff Huang X in writing; the three defendants shall jointly compensate the plaintiff for the notarization fee of RMB 6,660; and the other claims of the plaintiff Huang X were dismissed.
Online Game Account Use and Data Transfer Case: The Initial Registrant Shall Enjoy the Right to Use the Online Game Account and the Rights and Interests to the Transfer of Game Data in the Account
—— Hu X v. XX (Beijing) Technology Company and Beijing XX Technology Company and Third Person Wang X over Network Service Contract Dispute
As an important way of leisure and entertainment for modern people, video games have become an indispensable part of many people’s lives. To play games, players would obtain a game account, the electronic credential for logging in to the game, by reaching an agreement with the game company/operator. In today’s digital society, network virtual property such as game accounts has formed a new form of personal property. In this brand-new field, the great changes arising from new technologies have also brought many new legal problems to our society, posing new challenges to this blank field of justice. The judgment of this case has helped clarified the issue on ownership of network virtual property such as game accounts. According to Article 127 of the Civil Code of the People’s Republic of China, where there are laws particularly providing for the protection of data and network virtual property, such provisions shall prevail. This is the first time that the concept of network virtual property is written into the basic civil law, which also declares the protection of data and network virtual property by law, providing a legal basis for the provisions of relevant laws in the future. At the same time, however, it should be noted that the Civil Code does not prescribe for the specific details of protection, and the improvement of relevant laws are still necessary to enable future protection.
The game involved was an online game originally operated by XX Company. Both the plaintiff Hu X and the third person Wang X were players of the game. Hu registered the C account involved in the case on the website operated by XX Company, and bound the mobile phone number and email address registered under his real name with the C account. Later, Hu did not log in to the game involved for some time due to his own reasons. In December 2019, Wang X purchased the C account involved through a third-party website, and changed the identity number bound to this account to his own identity number, but did not change the mobile phone number and email address bound thereto.
In July 2020, the defendants XX (Beijing) Technology Company and Beijing XX Technology Company obtained authorization from XX Company and officially started to operate the game. After the change of the operators of the game involved, the two defendants announced on the login page the Rules for Inheritance of Player Account Data from Server A to Server B. According to the Rules, if a user wanted to continue to use the game involved and related services on Server B and keep all the game progress and achievements of the existing account on Server A, they need to inherit the existing account data from Server A to an account on Server B.
After the change of the operators of the game involved, Hu tried to inherit the data of the C account on Server A to the D account on Server B through the data inheritance channel opened by the two defendants and, after the operation failed, filed an “appeal on account dispute during data transfer”. After the platform decided that the appeal was successful, Hu inherited the data of the C account involved to his D account. Later, Wang X also submitted an appeal on account dispute during data transfer to the platform, demanding the data of the C account involved be retrieved. The platform also decided that the third person Wang X’s appeal was successful, and accordingly banned the D account of the plaintiff Hu X.
Therefore, Hu filed a lawsuit to the court, claiming that he didn’t know the player Wang X or the fact his account had been sold and requiring XX (Beijing) Technology Company and Beijing XX Technology Company to lift the ban on the D account for Hu’s use and bear the litigation costs of this case.
[Key Points of Adjudication]
The right to use the C account involved still belonged to Hu X
In this case, network users and the platform signed a network service agreement and formed a contractual relation thereunder. By signing the agreement, users were authorized to use the services and should abide by the relevant rules in the process of use. As game players involved in the case, both Hu and Wang should abide by the User Agreement of XX Online Game announced by XX Company when registering and logging in to their game accounts. The clauses of that agreement explicitly pointed out there shall be one sole right holder to each account and the sales of accounts would not be supported.
In this case, the mobile phone number and personal email address bound to the C account involved were registered under Hu’s real name and long used thereby, and Hu’s recharge record began as early as 2016. According to the registration agreement of the game involved, Hu should be the initial registrant of the C account involved and enjoy the right to use the C account involved. Although Wang X bought the C account involved on a third-party website and obtained the authenticated ID, password and other information of the account, neither Hu nor the website was the seller, and the agreement explicitly stipulated that the sales of the right to use an account shall be prohibited. Therefore, the subject of the right to use the C account involved did not change. As a result, the right to use the C account involved still belonged to Hu X.
Hu X had the right to inherit the data from C account to D account
From July 2020, the two defendants obtained the authorization and the account data and information on the original Server A from XX Company, and provided players with the data inheritance service of inheriting the account data on Server A to Server B. In accordance with the data inheritance rules announced by the two defendants on the platform, Hu applied for and registered the D account. Having the right to use both the C account and the D account involved in the case, Hu had the right to inherit the data of the C account involved to the D account as per the data inheritance process.
The two defendants’ act of suspending Hu X’s D account constituted a breach of contract
According to Article 119 of the Civil Code of the People’s Republic of China, a contract formed in accordance with law is legally binding on the parties to the contract. The game service agreement announced by XX Company and by the two defendants explicitly stipulated that a game account shall not be gifted, transferred or sold. In this case, although the third person Wang X bought the account, neither the plaintiff Hu nor the two defendants in this case were the seller, so they should not bear corresponding responsibilities for this.
In accordance with the agreement with the two defendants, the plaintiff Hu X, having the right to use both the C account and the D account involved in the case, inherited the game progress and achievements of the C account involved to the D account as per the data inheritance process. The data inheritance appeal materials submitted by Wang X included screenshots of the order for the trading of the C account involved, while the two defendants, as the actual manager of the player account data server of the original Server A and the actual operator of the game involved, still determined that the right to use the C account involved belonged to Wang and suspended Hu’s D account when they knew Wang obtained the C account involved through a transaction. This act of the two defendants thus constituted a breach of contract against Hu.
In view of the fact that the plaintiff Hu X had inherited the game progress, achievements and other data of the C account involved in the case to his D account, the Beijing Internet Court ruled on August 31, 2022 that the two defendants shall lift the ban on the D account involved in the case within seven days and allow Hu X to use it. Currently, the judgment of this case has come into force.
AI-Generated Content Case: Content Intelligently Generated by Computer Software Shall Not Constitute a Work
—— Beijing XX Law Firm v. Beijing XX Technology Company over Copyright Ownership and Infringement Dispute
Through this case, a judicial response has been made for the first time to the copyright protection of the content automatically generated by artificial intelligence software, affirming and protecting the intellectual and economic input of such content within the rights protection system of prevailing laws under the premise of not breaking through the basic norms on persons of the civil law, which not only affirms the value of computer intelligence software, but also cautiously keeps the boundary between copyright creation and subjects of rights. It is a beneficial attempt for the judiciary to actively deal with new technologies and new problems. This case has not only reflected the full understanding and accurate application of the existing legal system, but also reflected the clear attitude of Internet justice facing the future and embracing scientific and technological innovation.
On September 9, 2018, the plaintiff published the article Analysis Report on Judicial Big Data in the Film and Television Entertainment Industry—Film Part: Beijing Chapter (hereinafter referred to as the article involved) for the first time on its WeChat official account. The article consisted of two parts: written work and graphic work. On September 10, 2018, the accused infringing article was published on a platform operated by the defendant, which had basically the same content as the article involved except that contents like the signature, introduction, and retrieval overview parts of the latter were deleted. The plaintiff claimed that the defendant infringed on its right of communication through information network and right to authorship, and thus filed a lawsuit requesting the court to order the defendant to bear the tort liability. The defendant believed that the article involved was a report intelligently generated using a legal statistical data analysis software but not created by the plaintiff through its own intellectual labor, thus not falling in the protection scope of the Copyright Law.
[Key Points of Adjudication]
Regarding whether the content intelligently generated by computer software constitutes a work and the authorship thereto
Works should be created by natural persons. In the process of generating relevant content, the acts of software developers (owners) and users were not acts of creation, and the relevant content did not convey their original expression. Therefore, neither of them should be the authors of the content intelligently generated by the computer software, and the content does not constitute a work. Although Software developers (owners) and users cannot indicate their names on the content as authors, from the perspective of protecting the public’s right to be informed, maintaining the good faith of the society and facilitating cultural communication, the logo of the corresponding computer software should be added to indicate that the relevant content was intelligently generated by software.
Regarding the allocation of interests in the content intelligently generated by computer software
Though the content intelligently generated by computer software does not constitute a work, it does not mean that it can be freely used by the public after entering the public domain. Software users, having made payments and conducted retrievals, should be given corresponding rights and interests in order to stimulate their use and communication acts and promote cultural communication and scientific development. Users of the software may also use reasonable means to indicate their interests in the intelligently generated content of the computer software involved.
The defendant shall publish a statement to eliminate the impact caused to the plaintiff and compensate the plaintiff for the economic loss of RMB 1,000 and the reasonable expenses of RMB 560.
The plaintiff filed an appeal after the judgment of the first instance was made. The court of second instance dismissed the appeal and upheld the original judgment.
AI Companion Case: Network Platforms’ Use of Algorithms to Organize Users to Create Virtual Characters Constitutes Infringement
—— He X v. Shanghai XX Technology Company over Personality Right Infringement Dispute
This case was selected as one of the “Typical Civil Cases over Judicial Protection of Personality Rights after the Promulgation of the Civil Code” by the Supreme People’s Court and written into the work report thereof. It is the first case of a new type in China in which an algorithmic design was used to organize the infringement of personality rights. It has been made clear through this case that the personality elements such as name, likeness and personality characteristics contained in the “virtual character” of a natural person are the objects of the personality rights of the natural person, and the creation and use of the virtual character of a natural person without permission constitutes an infringement of the personality rights of the natural person. Meanwhile, it is emphasized through the case that the principle of “technology neutrality” shall not apply to network technology service providers embedding their subjective values and purposes in the algorithm design and rule setting, and thus they should be deemed as the actor of infringement who have provided the infringing content. According to the Supreme People’s Court, this case helps clarify that the personality rights of a natural person apply to the virtual character thereof as well, and allows a beneficial exploration on the evaluation standard of algorithm application, which is of great significance in strengthening the protection of personality rights in the era of artificial intelligence.
The defendant, Shanghai XX Technology Company, is the developer and operator of a mobile phone accounting software. In this software, a user can create his/her own “AI companion” to set the name and profile photo of the companion and the relationship therewith (such as boyfriend and girlfriend, brother and sister, mother and son, etc.) and have communication and interaction with the virtual character with the help of chat corpus. The plaintiff He X is a public figure. In this software, a large number of users set him as the companion and set a relationship therewith. XX Company classified the companion “He X” by identity through clustering algorithm and introduced this virtual character to other users through collaborative recommendation algorithm. When users set “He X” as the companion, they uploaded a large number of likeness pictures of the plaintiff to set the profile photo of the character. In order to make the virtual character more anthropomorphic, the defendant also provided a “training” algorithm mechanism, i.e., users could upload all kinds of interactive corpus such as words, likeness pictures and GIFs that were consistent with the persona of the virtual character; after some users participated in the review, the defendant could use artificial intelligence for screening and classification to form a character-specific corpus. Users and the software made a special corpus for “He X”, which was used in the dialog between He X and users according to the category of the topic and the persona of the character, so as to create an experience for users to believe that they were really interacting with the plaintiff He X.
The plaintiff He X, believing that the act of Shanghai XX Technology Company infringed on his right to name, right to likeness and general personality rights, filed a lawsuit requesting the court to order the defendant to make a public apology and compensate the plaintiff for economic loss and mental damage. The defendant XX Company argued that it should not bear the tort liability because the acts of role setting, likeness picture uploading, corpus “training”, etc. disputed by the plaintiff He X were all made by users, and the defendant was only the network technology service provider which had explicitly required in the user agreement that users shall not commit any acts that infringe on the rights and interests of others and deleted the “AI companion” containing He X’s name and likeness after He sent a notice.
[Key Points of Adjudication]
The principle of “technology neutrality” shall not apply to network technology service providers embedding their subjective values and purposes in the algorithm design and rule setting
With the in-depth application of technologies, network service providers have begun to get deeply involved in the creation and provision of content. If a network service provider, which on the surface provides technical services only, embeds its subjective values and subjective purposes in the rule design and algorithm application of products to directly determine the realization of the core functions of product services, then the technical services provided thereby are not simple “channel” services, and the network service provider is no longer a neutral technical service provider, but should bear tort liability as a network content service provider.
In addition, compared with ordinary users, software developers are more likely to obtain permission from others to use their personality interests commercially. Therefore, evaluating the acts of software developers from the perspective of technical services only is not conducive to the protection of personality rights and interests and the governance of cyberspace.
Personality rights of a natural person shall apply to the virtual character thereof as well, for the protection rules of which the protection rules on general personality rights and on specific personality rights can be cited simultaneously
The personality elements such as name, likeness and personality characteristics contained in the “virtual character” of a natural person are the objects of the personality rights of the natural person, and thus the creation and use of the virtual character of a natural person without permission constitutes an infringement of the personality rights of the natural person.
The personality rights of a natural person include specific personality rights and general personality rights. Specific personality rights such as the right to likeness and right to name have specific and definite objects and contents. General personality rights, different from specific personality rights, are framework rights, the objects of which are other personality rights and interests enjoyed by natural persons based on personal freedom and personal dignity, other than the specific personality rights. Due to the continuous innovation of Internet industry models and the development of new technologies like virtual reality, more and more personality elements of natural persons have been virtualized. Therefore, only by combining the protection of specific personality rights with the protection of general personality rights can personality rights of individuals be comprehensively protected. In practical application, general personality rights serve mainly as a supplement to the protection of specific personality rights. When the infringed personality rights and interests cannot be fully covered by specific personality rights, the right holder can claim the simultaneous application of the protection rules on general personality rights as the remedy.
The defendant shall make an apology to the plaintiff and compensate the plaintiff for economic loss, reasonable expenses and mental distress of RMB 203,000.
After the judgment of first instance was made, the defendant filed an appeal but later withdrew it. The judgment of the first instance has come into force.
User Profile Case: Collecting User Profile Information During User Login Process Without Providing Skipping Options Constitutes Infringement of Users’ Personal Information Rights and Interests
—— Luo X v. Shenzhen XX Technology Company over Personal Information Infringement Dispute
This case is the first infringement case over app’s compulsory collection of user profile information in China that was adjudicated by applying the Civil Code, which has gained wide social influence and attention. This case has helped clarify the important rules on two basic issues in the collection and processing of user profile information. First, is it necessary to obtain the users’ consent? Second, how to identify “effective consent”. The court’s judgment, having established explicit standards for applying legal rules to the industrial application of user profiles, can provide clear guidance for acts of processing personal information including user profiles, which is conducive to the standardized, orderly and healthy development of the digital economy industry. The case was included in the work report made by the Supreme People’s Court at the Second Session of the 14th National People’s Congress and nominated for the Ten Major Typical Cases over Consumer Rights Protection in 2022.
[Key Points of Adjudication]
Was the defendant’s act of collection necessary for the conclusion and performance of the contract?
In determining whether the collection act involved was necessary for concluding and performing the contract, the court considered the relevant industrial specifications and product function settings:
First, from the perspective of relevant industry specifications and standards, according to the Regulations on the Scope of Necessary Personal Information for Common Types of Mobile Internet Applications, the basic functional services of learning and education apps are “online tutoring, online classes etc.”, and the necessary personal information includes the mobile phone number of registered users. It can be seen from this stipulation that the defendant, as a learning and education software, should not include personal information beyond the phone number into the necessary scope of collection. Both the Personal Information Protection Law and the Personal Information Security Specification have explicitly stipulated that information push through personalized decision-making shall not be used as the necessary or only model of information push, and it is necessary to provide options that are not specific to personal characteristics or provide convenient ways of rejection at the same time. Accordingly, the defendant may not claim the collection of user profile information as the premise of providing services on the ground that it only provides one business model, i.e., the information push based on personalized decision-making.
Second, judging from the functional settings of the software or website involved, the scope necessary to perform the contract should be limited to the basic service functions provided by the software or network operators, or the additional functions that users independently choose to add on the premise that options are available. In this case, the defendant argued that the collection was aimed to push personalized courses suitable for different users in a targeted way based on the needs of different users, which belongs to an information push mode provided as an optimized setting to improve user experience. However, the basic service function of the defendant’s software or website was providing online course video streams and related information such as pictures, texts and videos, while the purpose of collecting user profile information was not to support its basic service function. Moreover, there was no evidence that the plaintiff in this case independently chose to use this function of optimized setting, so the defendant did not have sufficient basis to implement the act of collection on the ground it was necessary for realizing the function of its software or website.
Did the defendant obtain the “informed consent”?
According to the ascertained facts, the defendant configured the account and password for the plaintiff without the plaintiff’s permission, due to which the plaintiff, when trying to log in to the defendant’s website and software, used a page different from the general user registration page and directly entered the login page without going through the step of checking the informed consent concerning personal information. Therefore, when collecting user profile information during the plaintiff’s login process, the defendant did not have the prior consent of the plaintiff.
On this basis, the plaintiff claimed that even if the consent interface was checked, the defendant’s compulsory collection of unnecessary information in the login process still constituted infringement. In this case, the software involved in the case required the user to submit information like occupation type, grade in school, English level, etc. in the user’s first login interface, without setting a login mode such as “Skip” or “Reject” to enable login when the user disagrees to the submission of relevant information, making submitting relevant information the only way to successfully log in and enter the homepage of function use. Such consent or such provision of personal information was made under duress or disguised coercion, without the free or voluntary consent of the subject of the information, and shall not be identified as an effective consent. Therefore, setting the personal information collection interface on the first login page without providing options for skipping or rejection was compulsory collection of the plaintiff’s personal information and did not produce the effect of obtaining effective authorization and consent.
To sum up, the defendant’s compulsory collection of the plaintiff’s user profile information like occupation, grade in school, English level and learning purpose in the two products involved without prior effective consent of the plaintiff constituted infringement.
The defendant shall provide a copy of the plaintiff’s personal information to the plaintiff, stop the infringement, delete the plaintiff’s personal information, make an apology and compensate the plaintiff for the loss of RMB 2,900.
One-RMB Delivery Fee Case: Delivery Platforms Failing to Fulfill the Obligation of Giving Reminders upon Delivery Fee Difference Due to Algorithm-based Calculation Shall Bear the Liability for Wrongs in Conclusion of Contract
—— Chen X v. Beijing XX Technology Company over Network Service Contract Dispute
Fully protecting the legitimate rights and interests of consumers is an inherent requirement for the high-quality development of the platform economy. In this case, after ascertaining the basic logic of XX Delivery Platform in calculating the delivery fee, the court concluded that the estimated delivery fee displayed by the app may mislead consumers and pointed out the problems of the platform in informing parties to the contract, giving reminders on and explanations for updates of terms, etc. Through the judicial judgment of the case, the operator was urged to improve the ordering platform to fully protect the rights and interests of consumers. Although this was just a single case, the problem reflected by the case has become universal considering the huge user group of the delivery platform and the wide application of the estimated information display technology. The adjudication of this case can effectively promote platforms with similar problems to identify risks and reduce disputes and serve as a minore ad maius argument.
The defendant is the operator of a delivery platform. On October 29, 2019, the plaintiff ordered food through the defendant’s platform. In the process of placing an order, after the plaintiff selected the dishes, “Additional delivery fee: ¥7 ¥6” was displayed at the bottom of the page; the plaintiff clicked “Go to settle”, and “Delivery fee: ¥8 ¥7, with reduction of RMB 1” was displayed on the “order confirmation” page; then after the plaintiff clicked “Submit order” and paid the price, “Delivery fee: ¥8 ¥7” was displayed on the “order completed” page. The plaintiff held that the delivery fee should be settled at RMB 6, and the defendant committed fraud in price; and that if the defendant didn’t commit fraud in price, it shall bear the liability for wrongs in conclusion of contract. The plaintiff requested the court to order the defendant to acknowledge the fact of fraud, make an apology to the plaintiff and compensate the plaintiff for the loss of RMB 500. The defendant acknowledged the possibility of inconsistence in the amounts of delivery fee in the above-mentioned pages, but held that it was caused by the use of different positioning technologies. The defendant argued that after a user enters the platform, the platform, with the user’s authorization, would obtain the coordinates in longitude and latitude of the user’s current location through base station or wifi, that is, the homepage positioning. After the user selects the goods, the platform would estimate the delivery fee according to the positioning of the user and the merchant’s location; then after the user clicks “Go to settle”, the user would choose a saved address or a new address as the delivery address; then the platform calls the map software to obtain the location of the delivery address according to the address input by the user, and calculates the actual delivery fee. Comparison of the coordinates in the back-end log of the order involved has shown that in this case the delivery distance calculated based on homepage positioning was greater than the delivery distance calculated based on the delivery address positioning. Therefore, the defendant held that it did not commit fraud or a wrong in conclusion of contract.
In order to verify the evidence provided and information stated by the defendant, the judge went to the premise of the defendant to examine the back-end log record of the order involved, which was consistent with the contents shown in the evidence. Meanwhile, 10 delivery orders were randomly called from the back-end data of the platform as per the time and place designated by the judge. According to statistics, there were 6 orders in which the longitude and latitude provided by homepage positioning were consistent with the longitude and latitude provided by delivery address positioning and 4 orders in which the two were inconsistent with each other. In 3 orders thereof, the delivery distance calculated based on homepage positioning was less than that calculated based on the delivery address positioning; while in the other order thereof, the former was greater than the latter.
[Key Points of Adjudication]
This case involved a dispute arising from the difference in the distribution fee displayed on the previous and subsequent pages during the conclusion of the delivery service contract. Due to the lack of transparency in the algorithm of the distribution fee and the non-negotiability of amount thereof, consumers have the right to raise questions. However, whether the claims of the user were tenable should be determined in accordance with the law after the court finds out the facts.
Regarding whether the platform committed fraud
Fraudulent acts are identified when the following constitutive requirements are met: the actor has fraudulent intent and has implemented the fraudulent act, and the other party has made a wrong expression of intention because of that. According to the facts ascertained in the case, the defendant used the homepage positioning technology to estimate the delivery fee on the “commodities selection” page. The estimated delivery fee was displayed for consumers’ reference, which was not an act of expressing its intension. Therefore, the defendant lacked the fraudulent intention, and did not implement fraudulent act that induced the other party to fall into the wrong expression of intention. The consumer’s claim that the platform committed fraud was not tenable.
Regarding the determination of the platform’s liability for wrongs in conclusion of contract
Article 500 of the Civil Code of the People’s Republic of China has listed two typical circumstances of wrongs in the conclusion of contract: engaging in consultation with malicious intention under the guise of concluding a contract, and intentionally concealing material facts or providing false information concerning the conclusion of the contract; and one catch-all clause. This is consistent with the provisions of the Contract Law on wrongs in conclusion of contract. Since the legal facts involved in the dispute in this case occurred before the implementation of the Civil Code, the provisions of the Contract Law must still be applied. According to the facts investigated in this case, the two typical circumstances listed in the law cannot be applied in this case. Therefore, in determining whether the defendant’s act constituted any other acts contrary to the principle of good faith, the court comprehensively considered the constitutive requirements of the liability for wrongs in conclusion of contract. It is generally believed that the liability for wrongs in conclusion of contract must meet the following conditions to be tenable: (1) the contracting party breached the pre-contractual obligations in the process of concluding a contract; (2) the other contracting party suffered damage; (3) there was a causal relationship between the breach of pre-contractual obligations and the damage; and (4) the breaching party was at fault. In this case, the court, based on the fact that the difference in the delivery fee displayed in previous and subsequent pages caused misunderstanding to the consumer and after analyzing the characteristics of the platform, the calculation method of the distribution fee, the verifiability of the deviation of delivery fee and the cost factors, put forward the view that it is necessary and possible for the platform to give reminders on the estimated delivery fee, and such reminders will not increase the transaction cost of the platform significantly. Based on the above analysis, the court held that based on the principle of good faith, the defendant shall be obliged to give reminder on the fact that the estimated delivery fee is not the content of the offer. In this case, the defendant failed to fulfill the obligation of giving reminders and was thus at fault in the process of concluding the contract.
As far as the consumer is concerned, it is difficult for him to recognize that the delivery fee of RMB 6 was only the estimated amount. The consumer chose to believe that the lower amount would be the final delivery fee, which was in line with the reasonable expectations of ordinary consumers. The reliance interest arising therefrom should be protected. The extra price paid by the consumer for concluding the contract and the reasonable expenses incurred for safeguarding rights were the actual loss incurred by the customer, for which the defendant shall compensate the consumer.
The court ruled that the defendant shall compensate the plaintiff for the loss of RMB 1. After the judgment was made, both parties refused to accept it and respectively filed an appeal. The court of second instance dismissed the appeal and upheld the original judgment.
Case of “Pig-butchering Scam” Misjudgment by Dating Platform’s Algorithm: Algorithm-based Risk Control System Performing the Reasonable Duty of Care and Taking Precautions Does Not Constitute Infringement
—— Li X v. XX Company over Right to Reputation Infringement Dispute
This case is the first case decided by the court that involved the dispute over infringement of personal rights and interests caused by an algorithm-based risk control system. In this case, a forward-looking exploration was made on the rules for identifying infringement by algorithm. During the adjudication, the court established the comprehensive evaluation factors for identifying infringement by algorithm based on considerations stated in the provisions on the dynamic system theory prescribed in Article 998 of the Civil Code, according to the application of algorithm-based risk control in specific scenarios. The judgment of this case, having established a reasonable standard of duty of care and specific identification factors for the platform and dynamically balancing public interest and individual rights, is a model of the application of the dynamic system theory in the field of platform governance. This case was selected as one of the Ten Major Media Law Cases in China in 2022.
The plaintiff Li X, an employee of a financial company, registered an account on the dating platform operated by the defendant and submitted a real photo as the profile photo and the mobile phone number registered under the real name thereof. During Li’s normal use of the platform, the defendant blocked his account and reminded other netizens that “the account may have unusual activities” and “please don’t have money transfer with the account”. This situation led many friends of the plaintiff to mistake the plaintiff for a liar, which caused damage to the reputation of the plaintiff. The plaintiff filed a lawsuit to the court, holding that the platform operated by the defendant implemented algorithmic technology which caused misjudgment and infringed on his right to reputation, and requesting the court to order the defendant to publicly apologize to the plaintiff on its platform to clarify the fact and compensate the plaintiff for the loss of RMB 20,000.
The defendant argued that as the operator of the platform involved in the case, it was fulfilling the main responsibility of the platform by regulating users’ acts on the platform in accordance with the laws and regulations; when the plaintiff, as a registered user of the platform, chatted with other users of the platform, high-frequency words involved in “pig-butchering” scam cases, such as “finance”, “fund” and “add me/you on WeChat” were repeatedly detected in a short period of time, which automatically triggered the audit rules of the risk control system of the defendant’s platform, but the defendant unblocked the account following manual verification after the plaintiff called customer service to reflect the situation; the defendant was only fulfilling the main regulatory responsibility for the public interest in accordance with the laws and thus did not have any infringing act as it was the system that automatically identified the plaintiff’s account as a risky account.
[Key Points of Adjudication]
According to Article 998 of the Civil Code of the People’s Republic of China, in determining the civil liability that an actor is to bear for infringing upon others’ mental personality rights, consideration shall be given to the occupations of the actor and the injured person, the scope of impact of the act, the degree of fault, as well as such factors as the purposes, methods, and consequences of the act. In determining the subjective fault and infringement of algorithm application act involved in the case, the court considered the following factors based on the characteristics of algorithmic technology and the development status of the relevant industry: the purpose and subjective intention of the act, whether the act was justified, the means and nature of the act, the degree of the risk of infringing on personal rights and interests, the degree of prudence in the course of the act, whether reasonable measures were taken to prevent infringement; the characteristics of the actor’s identity, the level of technical ability and the attached duty of care to make an evaluation as follows:
First, regarding the purpose and subjective intention of the act and whether the act was justified: seen from the vocabulary and acts targeted by the “preventive risk control system” involved in the case, it was indeed the purpose of the system to prevent online fraud crimes like “pig-butchering scam”. By strengthening the monitoring and prevention functions towards high-risk accounts through technical means, the network service provider was performing the obligation of regulation stipulated by law. Meanwhile, the prevention of online fraud crimes was also to protect the public interest of unspecified network users. Therefore, the subjective intention of setting up the risk control system involved in the case was to fulfill the regulatory obligation required by law and protect public interest, which was justified.
Second, regarding the means and nature of the act, the degree of the risk of infringing on personal rights and interests and the degree of prudence in the course of the act: although the setting of the algorithm application involved was for a justified purpose, algorithm setting should be reasonable and proportional under the current technical conditions, without the use of any illegal means such as algorithmic discrimination and algorithm abuse that infringe on the legitimate rights and interests of others. According to the ascertained facts and the logic process of the algorithm disclosed by the defendant, the setting of the algorithm involved was an automatic response mechanism based on specific vocabulary and user acts, containing no improper discrimination against a certain type of users, and there was no evidence to prove that the act involved was a manual or automatic targeted act against the plaintiff, so the algorithm involved has certain technical neutrality.
Third, regarding the characteristics of the actor’s identity, the level of technical ability and the attached duty of care, as well as whether reasonable measures were taken to prevent infringement: in view of the fact that the platform operated by the defendant is an online dating app for strangers, it is reasonable for the defendant to strengthen the screening of online fraud crimes such as the “pig-butchering scam” under the current social background. As the algorithmic technology is still in the development stage and the relevant industry norms are not yet mature, we should encourage the innovation and positive development of algorithmic technology and reasonably determine the duty of care. In this case, the defendant did verify the misjudgment, unblock the account, and remove the risk warning within the stated time limit through the manual audit promised thereby. Accordingly, the defendant did fulfill the duty of care that matched the risk detected by the algorithm involved and take reasonable measures to prevent infringement.
To sum up, the defendant set up an algorithm application of “preventive risk control system” to conduct neutral and undifferentiated risk screening of users’ acts based on the regulatory requirements of the law and the purpose of protecting the public interest. Despite the misjudgment by the system due to technical limitations, the defendant fulfilled its duty of care that matched the risk detected by the algorithm involved and took reasonable measures to prevent infringement, thus having no subjective fault and not committing infringement. The plaintiff’s claims for compensation of economic loss and reasonable expenses and apology based on the defendant’s infringement, lacking factual and legal basis, would not be supported by the court.
The claims of the plaintiff were dismissed. Neither party appealed after the judgment of first instance was made, and the judgment has come into force.
Case of Banning Game Account for Cheating: It Is Reasonable for Game Operators to Ban Accounts Using “Script Cheating” Through Algorithm
—— Ma X v. XX Company over Network Service Contract Dispute
Cheating acts in the game field, while bringing users a different game experience and more game rewards compared with general players, destroy the overall game rules and game ecology. In this case, the court made a negative appraisal of the use of “script” in online games from the perspective of law and affirmed the online service provider’s act of prohibiting the online user from participating in online activities in violation of the principle of good faith and banning the account in accordance with the agreement, which has safeguarded the rights and interests of the majority of game consumers not involved in the case and a fair online game environment and ensured the healthy development of the game industry.
The plaintiff Ma X was a game player and the defendants were the game operator. The defendants, concluding based on the back-end data that the plaintiff repeatedly played the game without interruption for several days, which obviously does not conform to the normal time curve of physiological rhythms of human beings, and the tracks and items used in the game were analyzed as conforming to the automatic operation characteristics of “script cheating” software, permanently banned the account of the plaintiff and refused to refund the balance in the account on the ground that the plaintiff used illegal “script cheating”. The plaintiff, claiming that in doing this the defendant violated the contract, requested the court to order the defendant to compensate the plaintiff for the equivalent amount of the game account of RMB 10,000.
[Key Points of Adjudication]
Were the involved Game Service and Licensing Agreement and the supplementary agreements thereto legal and valid?
Since the two defendants jointly provided online game services for the plaintiff Ma X, the plaintiff and the two defendants have formed a contractual relation under the network service contract on the game involved. The plaintiff, having used the game account involved for a long time and entered the game many times, should know the contents of the agreement. The clauses involved explicitly stipulated that “using scripts to play games will lead to the banning of accounts and no refund”, and the clear expression left no room for misunderstanding. Thus, it was reasonable and necessary for the defendants to take measures to ban the account, because imposing necessary restrictions on acts that violate the principle of good faith and undermine fair trade is a necessity for maintaining a good order in the entire field of online games. To sum up, the relevant agreements involved in the case were legal and valid, and the two defendants have fulfilled their obligation of giving full reminders on the “account banning” clause, so the “account banning” measure was reasonable and necessary.
Did the plaintiff use scripts in violation of the rules?
The evidence provided by the two defendants can prove that the plaintiff’s game playing act cannot be completed through normal operation by ordinary human beings, as the time curve was in serious contradiction to the “physiological law” of human beings, and the tracks in the game displayed synchronously in abnormal time periods were more similar to those completed by some automatic script.
Was the defendants’ punishment to the plaintiff reasonable?
In this case, the plaintiff, having signed the user agreement with the two defendants, should have followed the principles in accordance with the contract and stopped game operations in violation of the rules like using scripts to maintain a fair and just online game environment together with other players and the service provider. However, the plaintiff adopted a dishonest game mode in playing the game and ignored the banning announcement issued by the defendants, which harmed the interests of other players and the game operators. Banning the account of the user violating rules without refunding the account balance showed that the game operator has certain management duty and showed some disciplinary implications, which is conducive to deterring violating acts in game playing, creating a fair and honest online game environment, improving players’ game experience and promoting the healthy development of the game industry. Therefore, the court did not object to the two defendants’ act of banning the plaintiff’s account.
In the judgment, the claims of the plaintiff were all dismissed. Currently, the judgment of this case has come into force.
Case of Short Video Platform Banning a Pedophile’s Account: Platforms Shall Have the Right to Take Management Measures Like Account Banning or Termination of Service Based on Algorithm Against Acts of Infringing on the Rights and Interests of Minors
—— Zheng XX v. Beijing XX Technology Company over Network Service Contract Dispute
In this case, the court, on the basis of fully examining and strictly scrutinizing the legitimacy of the platform’s exercise of “private power”, finally made a decision to support the defendant’s platform in taking corresponding punishment measures, which not only advocated the code of conduct for maintaining the clear network environment for minors, but also defined the ought-to-be boundary of the platform’s exercise of “private power”, setting a yardstick worthy of reference for similar cases in the future.
When the plaintiff Zheng XX used a short video platform to watch videos, his account involved was permanently banned by the platform on the grounds of “suspected violation of community pact, involving excessive attention to or browsing of minors-related content”, and the mobile phone used by Zheng could no longer be used to register an account on, log in to, and use the platform. Zheng expressed that it was extremely unreasonable for the platform operator Beijing XX Technology Company to ban the account involved and the login privilege of the corresponding mobile phone because he just liked to watch dance videos and did not over-browse related content involving minors, it was normal to use the account involved to browse and like related videos, and all videos were recommended by the system. Zheng filed an appeal and made phone calls requiring the platform to resume his account, but failed. Zheng believed that the platform’s banning of the account and the corresponding mobile phone without due cause constituted a breach of contract and thus filed a lawsuit to the court against Beijing XX Technology Company.
The defendant Beijing XX Technology Company argued that Zheng’s account involved in the case followed and liked a large number of videos with underage girls as the main content and posted pornographic comments; he also uploaded videos of underage girls in violation of the rules, which took advantage of minors. In response to the requirements of national laws and policies, the platform established a strict system for the protection and review of minors. Since the act of the account involved seriously violated the relevant policies and regulations of the state on the protection of minors, it was reasonable, legal and necessary for the platform to ban the account involved. Meanwhile, the defendant provided a smooth appeal channel. Although the account involved in the case had been punished many times, and the user had been repeatedly required to learn the community rules since March 2021, the account involved still committed violations, and thus it was reasonable for the defendant to permanently ban the account and the mobile phone.
[Key Points of Adjudication]
The account involved committed breach of contract
The service agreement, self-discipline pact and security center of the defendant’s platform all explicitly stipulated that “it is prohibited to make any act or have any content that harms the physical and mental health and legitimate rights and interests of minors, including pornographic and vulgar content involving minors and content taking advantage of minors; it is prohibited to make any act of disseminating bad values and to spread soft pornography, vulgarity or sexually suggestive, sexually teasing and other sexual explicit content or display vulgarity, kitsch, low taste, vulgar culture, etc.”. “Paying excessive attention to and over-browsing minors-related content” includes “being active in the comments section of minors-related videos, frequently publishing vulgar pornographic remarks, expressing love for children in teasing words”, etc. In this case, when the plaintiff registered as a member, he signed a service agreement with the defendant. And relevant agreements on other functions of the platform, as the supplementary content of that agreement, had the same legal effect as the service agreement. The relevant clauses in the above-mentioned agreements and specifications did not violate the prohibitive provisions of national laws or contain any content significantly exempting the provider of the standard terms from liability, aggravating the liability of the other party or excluding the other party from its main rights, and shall thus be legal and valid.
In this case, the plaintiff Zheng XX posted a large number of comments containing verbal teasing, kitsch and some pornographic emojis in the comments section of several videos involving minors. After the defendant found through algorithmic identification that the account involved of the plaintiff was a risky user under the algorithmic risk assessment system “Children Care Program” and conducted a manual review through the “Children Care Program” queue, it was determined that the plaintiff’s account involved had acts of paying excessive attention to or over-browsing the related contents of minors, which violated the community self-discipline pact. The court held that there was nothing wrong with the result determined by the defendant, which was supported by factual basis.
It was legal and in compliance with the contract for the defendant to ban the account involved
The service agreement signed between the plaintiff and the defendant stipulated that “in case of your violation of this agreement or other terms of service, the company has the right to make independent judgments and take measures as appropriate ... from restricting part or all of the functions of the account to terminating the service and permanently closing the account”. According to this agreement, the defendant can impose different punishments on user accounts involving different types of risks through algorithms, system identification and other methods.
In this case, the account involved was punished three times by the platform for violating community rules for “paying excessive attention to or over-browsing minors-related content”, and the platform repeatedly criticized it and required its corrections. However, after ban on the account involved was lifted, the plaintiff continued to post a large number of comments containing kitsch and vulgar culture under videos involving minors, which constituted serious breach of contract. Thus, the defendant’s measures to terminate services and permanently close the account involved did not exceed the necessary limit. Meanwhile, the defendant took the above measures to prevent the plaintiff from continuing to commit violating acts by using another account, better protect the legitimate rights and interests of minors and their physical and mental health, and purify the cyberspace environment. To sum up, it was legal and in compliance with the contract to ban the account involved.
In the judgment, the claims of the plaintiff Zheng XX were all dismissed. Neither party appealed after the judgment of first instance was made, and the judgment of the case has come into force.