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 4-7.

Case 4

The seller commits fraud by deliberately confusing the material concepts in clothing products

Case summary

The plaintiff, surnamed Liu, purchased six pairs of pajamas during a livestreaming session from the defendant Surnamed Wang's online store. During the session, Wang claimed that all the pajamas were made of heavyweight silk, specifically "95 percent real silk and 5 percent Lycra". Wang claimed they were being sold at a low price because they were the last products from the offline retail stores. After receiving the goods, Liu found that the tags on the items all said "95 percent silk and 5 percent Lycra". Upon failing to reach a resolution through negotiations Liu sued Wang at the BIC, demanding a refund and triple compensation.

Details of the judgment

According to the recording of the livestreaming session, the BIC found that the defendant described the goods as made of 95 percent real silk instead of artificial silk. However, the tags on the items received by Liu said 95 percent silk, which in this case, referred to artificial silk. Given the big difference between real silk and artificial silk in definition, value and quality, the court determined that the defendant, as a seller of clothing products, intentionally confused the two concepts, thereby engaging in intentional false advertising. It led the plaintiff to mistakenly believe that the items in question were made of real silk and subsequently purchase them. The court ruled that the defendant's false advertising constituted fraud and supported the plaintiff's claims for refund and triple compensation. 

Significance

In livestreaming e-commerce sector, some merchants take advantage of consumers' ignorance regarding clothing materials, intentionally confuse concepts such as real silk and artificial silk to mislead consumers in their purchases, seriously infringing upon consumers' rights to information and to fair trading. This case clarifies the substantive differences in the material terminology, identifies the fraudulent nature of merchants confusing concepts and blurring the true attributes of goods, and clearly defines the legal boundaries of merchants' false advertising in livestreaming sales. It strengthens judicial protection of consumers' right to information and holds demonstrative value in regulating live-streaming e-commerce and maintaining a healthy market order.

Case 5

A sales contract dispute regarding blind box toys

Case summary

The plaintiff, surnamed Zhang, bought a whole package of blind box figures (a total of nine pieces) from the online shop operated by the defendant company. The product description stated that  the package included eight regular figures and one hidden figure, with a notice saying the blind box goods in the store are special items that are dispatched randomly and not applicable to the seven-day no-reason return policy. After placing the order, Zhang received feedback from the service staff saying there would be no repeated designs in the package. Upon receiving the package, Zhang found there were two pieces of the same design. Zhang applied for a full return of the goods and refund, which was rejected by the store. Claiming that the store committed fraud by fraudulent advertising, Zhang sued the company at the BIC after futile negotiations with the store, requesting full refund and triple compensation. 

Details of the judgment

The court held that although the service staff stated in response to the plaintiff's inquiry that the designs of the involved goods would not be repetitive, the product description did not clearly guarantee non-repetition. Therefore, this would not mislead a reasonable consumer into placing an order. The defendant responded proactively when dealing with the after-sales situation and agreed to replace the repeating design. Therefore, the inconsistency of the goods was more likely due to erroneous packaging than intentional fraud. The BIC thus did not support the plaintiff's claim about the defendant had committed fraud.

Significance

With the increasing popularity of blind box products, the sales models of such products have continuously evolved. This case concerns a dispute arising from repetitive designs in a whole package sales model. Based on the characteristics of blind box products, the case clarified that with the promise of non-repetitive designs in whole package sales, if the consumers receive packages with repetitive designs which undermines the consumers' sense of surprise, and may constitute grounds for contract termination. The case is conducive to regulating blind box sellers' sales behavior, safeguarding the legitimate rights and interests of consumers, and boosting the development of new types of cultural industry in the digital era. 

Case 6

The seller commits fraud when replacing real gold with fake gold products

Case summary

The plaintiff, surnamed Yu, bought a gold product which was advertised as a "5g pure gold bean with hallmark" for 2,600 yuan ($359.5) from the defendant, surnamed Lin, via an online second-hand trading platform. Upon receiving the product, Yu had it tested and the appraisal result showed a cooper content of 50.66 percent copper and no detectable gold content. Yu filed a complaint with the trading platform, which was rejected. So Yu sued both Lin and the platform at the BIC, requesting a refund on the goods, and claiming compensation amounting to three times what he paid.

The court found out that the goods involved had been purchased by Lin from a third-party platform after the plaintiff Yu placed the order. The product was directly shipped to Yu by the vendor from the third-party platform. After verification with the third-party platform, it was found that what Lin purchased was called traditional-style imitation gold bean with a price of 65.55 yuan. 

Details of the judgment

The court held that Lin had fraudulent intent by selling fake gold products at the real gold price, while purchasing imitation gold products from a third-party platform and shipping buyers. According to the sales record of the second-hand trading platform, Lin had repeatedly sold the same goods and engaged in continuous sales for profit. He therefore qualified as a business operator stipulated in the Law on Protection of Rights and Interests of Consumers, and shall bear the punitive damage liability as prescribed in the law. 

As for the second-hand trading platform, although it did not support the plaintiff’s claims when dealing with the dispute, its conduct did not amount to knowingly or negligently failing to take necessary measures in the face of clear infringement of consumer rights. Therefore, the BIC did not support the plaintiff’s request for the platform to bear liabilities for compensation.

Significance

By taking into account the nature, source, quantity, price, trading frequency and profit of the goods sold by the seller, this case clarifies that that individuals who continuously sells goods for profit on the second-hand trading platform should be deemed business operators and assume corresponding legal responsibilities. This conducive to better protecting the rights and interests of consumers. In addition, the case serves as a reminder for consumers to buy luxury items from official channels such as branded shops and e-commerce platforms who are fully certified and licensed. In addition, keeping related transaction invoices and receipts is strongly advised. 

Case 7

Cross-border e-commerce operator commits fraud by selling counterfeit brand goods

Case summary

The plaintiff, surnamed Yin, bought a branded down jacket on an overseas shopping platform. The product was advertised with the label  "genuine products directly mailed from overseas". Upon receiving the jacket, Yin found discrepancies with the genuine brand jacket in terms of appearance and washing labels. After seeking verification from the brand's official channel, Yin sued the seller of the jacket on the overseas platform, surnamed Wang, at the BIC, requesting full refund and triple compensation. 

Details of the judgment

After investigation, the court found that the overall appearance and details of the jacket such as washing labels were different from the genuine ones. The emails submitted by the plaintiff from the brand's official channel showed that based on inspection of the fabric, labels, and other characteristics, the product was not authentic and therefore not eligible for repair services. The defendant Wang failed to give justifiable explanations. The court determined that the goods sold by the defendant was not genuine as claimed, and the defendant's false advertising constituted fraud. The court supported the plaintiff's claims for return of the goods, refund and triple compensation. 

Significance

The case provides a judicial practice example for consumers of overseas products, particularly where no domestic certification channels are available, by combining the acceptance of appraisal from official merchant of the brands with comparison of product details. It demonstrates the judiciary's zero-tolerance stance on cross-border consumption fraud, providing legal protection for consumers in cross-border transactions, building a fair and integrated competition environment for both domestic and foreign traders, and enhancing the confidence of international brands operating in China.