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Is benchmark price in price protection policy the original price or discounted price?

english.bjinternetcourt.gov.cn | Updated: 2024-03-08


To protect consumers' rights and interests, there is the price protection policy where consumers are entitled to get a refund of the price difference if the price of the purchased product drops within a certain period of time. Is the benchmark price referred in the price protection policy the original price or the discounted price? What if e-commerce platforms refuse to pay the price difference even when the policy applies? The experience of an online shopper surnamed Liu can give the answer.

Case summary:

On May 25, 2022, tempted by the advertisement of an online platform, the plaintiff surnamed Liu decided to purchase a pair of hiking shoes from a third-party vendor on the platform. Due to concerns about a potential major price drop during the coming annual June 18 shopping carnival, Liu consulted the vendor and learned that the product only enjoyed a seven-day price protection. However, the plaintiff found that the platform promised a 30-day price protection for the product, as shown on the product page.

According to the price protection policy of the platform, the guaranteed amount is the benchmark price at the time of order minus the benchmark price at the time of application for price protection minus the amount already returned by the price protection system.(Note: The benchmark price at the time of order is the product price at the time of order minus the discounted amount at the time of order, and the benchmark price for application for price protection is the product price at the time of application for price protection minus the discounted amount at the time of application for price protection.

For example, one buys a product for 900 yuan with the product price being 1,000 yuan and a discount amount of 100 yuan. The same product sells for 800 yuan later with a 200-yuan discount. The guaranteed amount is then the benchmark price at the time of order 900 yuan minus the benchmark price at the time of application for price protection 800 yuan, which is 100 yuan. The plaintiff specifically consulted the customer service hotline for the platform's members, the customer service promised that the price protection policy would cover the product for the whole June 18 shopping carnival period. Based on this commitment, the plaintiff purchased the product at a discounted price of 519 yuan.

However, on June 1, the discounted price of the product dropped to 470 yuan, and the plaintiff's application for price protection compensation was rejected. Both the third-party vendor and the shopping platform claimed that the benchmark price was the original price of the product, not the price after discount, which was inconsistent with the information the plaintiff acquired in advance and the price protection policy statement shown on the product page.

Despite multiple communications with platform customer service, they said they could not apply for the price difference. Also they did not provide a clear answer regarding the price protection policy. The plaintiff thus sued the platform at the Beijing Internet Court (BIC), requesting compensation of 500 yuan for economic losses and a public apology.

Main considerations:

The defendant, an e-commerce company, was the actual operator of the online platform involved in the case. When the plaintiff, as a consumer, purchased goods at using the platform, a network service contract relationship was formed between the plaintiff and the defendant. This contract represents the genuine intentions of both parties, does not violate mandatory provisions of laws and administrative regulations, and is legal and valid.

Therefore, both parties should jointly abide by the agreed price protection policy and the calculation method related to price protection policy, and the defendant was obligated to provide price protection services to the plaintiff in accordance with the agreement.

In this case, after reaching an agreement with the defendant on a 30 -day of price protection for the involved goods, the plaintiff placed an order based on trust and his right to the price protection service was enacted.

According to the price protection rules, as explained earlier, the benchmark price for enjoying price protection services should be the discounted price, not the original price of the goods. The plaintiff was entitled to the price protection service of the product with a benchmark price of 470 yuan.

When a dispute arose between the plaintiff and the third-party vendor, the defendant denied the platform's publicly displayed price protection calculation rules and failed to fulfill its related obligations according to its publicly displayed price protection policy. The platform’s final comment to the dispute was “the request for price protection was not feasible” and it also refused to return the price difference to the plaintiff, which violated the contract reached, went against the principle of good faith and credit, and harmed the consumer’s legitimate rights and interests. Therefore, the defendant should bear liability for breaching the contract.

Details of the judgment:

The BIC ruled that the defendant, the e-commerce company, should refund the plaintiff the price difference of 49 yuan within seven days of the judgement. The court rejected the plaintiff's other requests.

Neither party appealed after the first-instance judgement.The judgment has now taken effect.

Tips from the judge:


Judge Li Wenchao at the Beijing Internet Court

A platform's price protection rules are standard terms formulated by the platform operators, and constitute a major part of the network service contract between consumers and platform operator. The platform shall perform its contractual obligations in accordance with its publicly displayed price guaranteecalculation rules. In this case, the customer service explicitly stated that the price protection period for the product was 30 days, covering the June 18 promotion period. The platform should then fulfill the contract by applying the price protection rules as agreed for 30 days. And based on their price protection rules, the eligible benchmark price should be the discounted price instead of the original price of the product.

Significance of the case:

A platform's price protection rules are designed to protect consumers' rights and interests. These rules cover the transparency of product prices, price labeling and adjustments, and ensure the right of consumers to know the true situation of the goods they purchase and use or the services they receive. The adjudication rules of this case are conducive to ensuring a fair, transparent, and safe online consumption environment.