False consumption constitutes unfair competition! Tencent claims $1.2 million

 False consumption constitutes unfair competition! Tencent claims $1.2 million

It is the first case in China that the Internet special provisions of the anti unfair competition law are directly applied to the false consumption.

Does false consumption constitute unfair competition? A few days ago, the fifth intermediate peoples Court of Chongqing made a judgment in the first instance of Tencents lawsuit against data push company and Tans unfair competition case, ruling that the defendants false consumption constituted unfair competition and compensated Tencent 1.2 million yuan.

It is understood that the newly revised Anti Unfair Competition Law was implemented in 2018, and Article 12 specifically stipulates unfair competition on the Internet, which has become a major highlight. Considering the rapid development of Internet technology and business model, it also adds a cover clause to meet the needs of practical development.

The court official micro reprinted the article, saying that this case became the first case in China to directly apply the Internet special article (Article 12) of the anti unfair competition law to the Internet false consumption service behavior, which has reference significance for how to apply the anti unfair competition law in the Internet era, and has certain practical and theoretical significance in regulating the Internet gray black products.

Tencent sued the company for unfair competition

The case started with the defendant engaging in paid service.

The defendant pushed the company and tan to operate their website, aiming at improving the content information, click, quantity, browsing, reading and fans. With the help of other network marketing platforms, Tencent includes products such as Daily Express, Tencent video, Tencent micro, QQ space, QQ name card, WeChat and WeChat official account. And other operators website products or services, to provide paid sales of brush service.

Tencent believes that the number of views and clicks is an important basis for the companys content display ranking and business service decision-making. The false consumption behavior will not only lead to extra share or payment for the unreal high broadcast volume of products, but also affect the business strategy of products and services. False high or false data will give users wrong information, seriously affecting the user experience.

Therefore, Tencent sued the two defendants to Chongqing No.5 Central Peoples court to immediately stop unfair competition and compensate 5 million yuan.

In response, the defendant argued that his own conduct did not constitute unfair competition. The defendant held that the business model, business scope and profit model of the defendant were totally different from those of the plaintiff, so there was no direct competition, let alone unfair competition. In addition, the defendant believes that its brush volume business belongs to a kind of network promotion, which has the same function as ranking advertisement, headline and top ranking, and is a proper publicity means to improve the attention of product business.

At the same time, the defendant, Mr. Tan, said that the digital push company and Mr. Tan were only agents, and the implementers of the actual promotion business were other platforms. It does not damage the plaintiffs profit model, and its profit source is the direct benefit of agency sales interest spread rather than the behavior of brush volume, so it does not infringe the plaintiffs rights and interests.

The court ruled that false consumption constituted unfair competition

The focus of the dispute in this case is whether the defendants behavior of providing false consumption services constitutes unfair competition.

Article 12 of the anti unfair competition law stipulates that business operators shall not use technical means to influence the choice of users or other means to hinder or destroy the normal operation of network products or services legally provided by other operators.

The court held that in the case, the defendant had taken relevant technical means to secretly implement the behavior of brush volume, and since accepting the clients entrustment, the defendant has already started to provide false quantity service for customers. In accordance with the above provisions, other acts that hinder or disrupt the normal operation of network products or services legally provided by other operators shall be regulated by the anti unfair competition law.

At the same time, the defendants plea that the business scope is different from that of the plaintiff, and that his behavior does not belong to the unfair competition situation listed in the anti unfair competition law is not tenable. Unfair competition is not limited to horizontal competition. According to the interpretation of the Supreme Peoples Court on Several Issues concerning the application of law in the trial of civil cases of unfair competition, if one partys behavior violates the principle of good faith, disturbs the fair market order and damages the rights and interests of operators and consumers, it can be judged as unfair competition.

The court held that the act of providing false consumption service itself violates the principle of good faith and the norms of business ethics in Article 2 of the anti unfair competition law, and also damages the legitimate rights and interests of operators and consumers and affects the fair market competition order.

According to Article 19 of the measures for the administration of online transactions issued by the former State Administration for Industry and Commerce in 2014, network commodity or service operators shall not use network technology or carriers to engage in unfair competition behaviors such as promoting business reputation for themselves or others in the form of fictitious transactions and deleting adverse evaluation.

Similarly, to provide false data through paid service is to create business reputation by improper means and seek business opportunities for themselves. The false data will become the wrong direction in the transaction, cheating operators and consumers. It affects the business decision-making of Internet operators, infringes consumers right to know and choose, disturbs the normal and fair market competition order, and destroys the benign competition relationship among Internet operators.

In the first instance, the court ruled that even if the defendant entrusted its upstream to use technology to provide false consumption service, its behavior also hindered and damaged the normal operation of Tencents network products and services. Finally, it was determined that the two defendants behavior of providing false consumption service constituted unfair competition. It was necessary to immediately stop the unfair competition behavior, compensate Tencent 1.2 million yuan, and publish a statement to eliminate the impact.

(author: Zhang Yating, editor: Cao Jinliang)

Source: responsible editor of 21st century economic report: Wang Fengzhi_ NT2541