Editor's note: The Beijing Internet Court (BIC) held a press conference to brief the public on the adjudication of cases related to false advertising in online consumption on March 13, prior to the World Consumer Rights Day which falls on March 15. At the conference, the BIC released eleven typical cases. Following are the details of cases 1-3.

Case 1

Second-hand car seller commits fraud by failing to truthfully disclose engine replacement

Case summary

The plaintiff, surnamed Yu, purchased a second-hand car on a second-hand car trading platform. Due to oil seepage from the variable speed fuel tank, Yu sent the car to a 4S shop for maintenance and was informed that the entire engine assembly had been replaced. Yu then sued the used car trading platform at the BIC, requesting cancellation of the sales contract with the platform, and that the platform refund the purchase price and pay triple compensation. 

The defendant argued it was ignorant of the engine replacement when purchasing the car from another source. As a second-hand vehicle dealer, the defendant claimed that it has no intention of fraud, nor had fraud objectively been committed.

Details of the judgment

The BIC held that the defendant, as a professional operator engaged in second-hand vehicle transactions who also claimed to be a "professional second-hand vehicle dealer", was expected to have a higher level of knowledge and expertise than ordinary consumers regarding vehicle conditions. Consumers choose to purchase second-hand vehicles from such dealers based on trust in their professional capabilities. 

In this case, despite the obvious abnormality in the engine number plate of the vehicle in question, the defendant failed to verify the maintenance records of the vehicle and issued a report stating that the condition and performance of the vehicle were normal, which did not match the actual condition of the vehicle. This led the plaintiff to form a mistaken belief that there were no issues with the vehicle in question and proceeding with the purchase. The court found the defendant's conduct to constitute fraud, and ruled that it should bear the liabilities of contract rescission and triple compensation.

Significance

In the trading of second-hand vehicles, trading platforms are supposed to possess a level of knowledge and professionalism exceeding that of average consumers. They have an obligation to exercise due diligence regarding important factors affecting consumers' purchasing decisions, such as the condition of the engine. This duty of care should be held to a relatively more professional standard rather than that of an average consumer.. This case is conducive to promoting the implementation of platform responsibilities in the second-hand trading sector, upholding the principles of integrity and fair dealing, as well as fostering a favorable business environment.

Case 2

Penalizing merchants for false advertising on e-commerce platforms does not constitute a breach of contract

Case summary

The plaintiff, surnamed Wang was a merchant on a live streaming platform operated by the defendant company. Wang was penalized by the platform for engaging in serious false advertising during the livestream, where Wang's description of the products' size, weight and quantity did not match the information on the product details page. The penalties included product removal, a deduction of 12 credit points, and a 180-day suspension on all commission withdrawals. Wang claimed that the company's penalties lacked legal and factual basis  and requested revocation of the aforementioned penalties. 

The defendant argued that it is not only a service provider, but also an administrator and maintainer of the platform's environment, shouldering the responsibility of maintaining platform order, protecting consumers' rights, and preventing regulatory chaos. The penalties imposed on Wang were in accordance with platform rules, and Wang's accusations lacked factual and legal basis, therefore should be dismissed.

Details of the judgment

Based on evidence submitted to the court, the BIC found that the plaintiff had been warned multiple times by the platform for similar violations. Rather than correcting the behavior,  the plaintiff continued to engage in similar conduct in livestreams by misrepresenting product quantity and specifications. The penalties imposed by the defendant on the plaintiff were in accordance with platform rules and consistent with the agreement and legal provisions. No evidence was found for any breach or illegal actions by the defendant in imposing the penalties. Therefore, the BIC decided against the plaintiff's request as it lacked a factual and legal basis. The platform shoulders the responsibility of regulation and protecting consumers' rights. Regulating false advertising is part of the platform's responsibilities and should be supported.

Significance

With the thriving of live streaming e-commerce, live streaming platforms have become a key arena for consumer rights protection. As the administrator and maintainers of the platform environment, platforms bear the responsibility of maintaining platform order, safeguarding consumers' rights and interests, and preventing regulatory failures. According to the platform rules, their punishment of false advertising behaviors within the platform is an important manifestation of their implementation of platform responsibilities, maintaining the operation order of the platform, and purifying online trading environment. It has positive significance in preventing acts that infringe upon the legitimate rights and interests of consumers.

Case 3

Continuing false advertising despite administrative penalty constitutes fraud

Case summary

The plaintiff surnamed Liu purchased a baby bottle manufactured by the defendant company online for infant feeding. The product was advertised as a "weaning wonder that has swept the internet". After use, Liu and their family found that the baby bottle did not deliver the advertised effects. They believed the defendant's promotional content violated fundamental maternal and infant care knowledge and constituted consumer fraud. Liu filed a lawsuit against the defendant company at the BIC, requesting a return of the product and refund of the purchase price, compensation of 555 yuan, and a public apology in a prominent position on the defendant's official website. In response, the defendant argued that its promotional content was lawful and truthful, denying any false advertising. The company asked the court to dismiss all of the plaintiff's claims.

Details of the judgment

The BIC held that a civil act may be deemed fraudulent if one party intentionally provides false information or conceals the truth to mislead the other party. In this case, the defendant company was previously penalized by the market regulators for using promotional content such as "weaning magic tool: 350 million views on Douyin" and "5,000+ recommendations on Xiaohongshu". Despite this penalty, the defendant failed to promptly rectify the misleading promotional content and continued to employ exaggerated terms like "one billion views on Douyin" and "over 7,800 recommendations on Xiaohongshu". This behavior demonstrated subjective malice by fabricating facts and concealing the truth. During the trial, the defendant also failed to provide sufficient evidence to substantiate that its claims about the advertised effects. The BIC therefore determined that the defendant company committed fraud and ordered it to accept the return, refund the purchase price to the plaintiff, and pay triple the price, amounting to 555 yuan, as compensation. As the plaintiff's personal dignity and other rights were not infringed upon due to the relevant goods, the court dismissed the plaintiff's claim for a public apology.

Significance

Infant products like baby bottles are directly related to the healthy growth of the next generation. In recent years, the improper advertising and promotion of products in the maternal and infant sector have sparked major controversies. For false advertising, fraud and other illegal activities in the field of breast feeding substitutes such as baby bottles and nipples, it is essential to strengthen regulatory efforts. In this case, the defendant had already been penalized for false advertising yet failed to make corrections, thus they should bear liability for fraud and take the compensation penalty. 

This case sets an example that encourages enterprises in the maternal and infant products industry to operate lawfully, improve product quality, strictly abide by advertising-related laws and regulations, and avoid misleading consumers through false advertising, so as to contribute to the fostering of a healthy and orderly market.