Top court backs online consumers against fraud

China's top court has urged judges nationwide to intensify efforts to combat fraud in online consumption, making every effort to protect consumers' legitimate interests and promote the healthy development of the market.

On Monday, the Supreme People's Court highlighted the significance of consumer protection in the digital space by disclosing details of five notable cases. It reaffirmed that the growth and expansion of online consumption must occur within the framework of the rule of law.

One illustrative case involved an online seller surnamed Zhang, who was fined ten times the actual price of goods for engaging in false advertising and deceiving consumers.

During a livestream sale, Zhang falsely marketed a black rosewood bracelet as red sandalwood, assuring viewers of its authenticity and promising to "compensate tenfold for any fake". This assurance led a consumer named Hou to purchase the bracelet for 1,000 yuan ($139).

Upon receiving the bracelet, Hou discovered that the material did not match Zhang's description and subsequently took the matter to court.

The Consumer Protection Law stipulates that if someone is caught selling counterfeit goods, engaging in false advertising, or committing price fraud — such as falsely claiming that a fake product is genuine or misrepresenting its origin — they will compensate the consumer three times the purchase price.

After a trial, however, a lower court ordered Zhang to compensate Hou 10,000 yuan. "In livestream marketing, consumers heavily rely on the host's introduction to understand the product. In this case, Zhang's promise of compensation exceeding the legal standard built Hou's trust in the bracelet's quality, leading to his purchase," the court explained.

The court further clarified that when a product fails to meet the promised quality, compensation is warranted. "Despite Zhang's promise exceeding the legal requirement of triple compensation, it constituted a binding contract with the consumer. Therefore, Zhang was obligated to fulfill his promise," it added.

The top court acknowledged that the ruling serves as a deterrent against consumer fraud and helps create a trustworthy online shopping environment.

"The deep integration of the digital economy with the real economy is fostering new market dynamics and consumption patterns, thereby stimulating new consumer drivers," the top court stated.

It emphasized that online consumption has become a major mode of consumption for the public, necessitating that courts across the country strengthen their fight against those infringing upon consumers' rights and use legal methods to address emerging issues.

In another case, a consumer surnamed Ma received an apology and compensation from a dictionary app operator after a grassroots court ruled that its data collection practices violated Ma's personal information rights.

The lower court underlined that online service providers should collect user information only when the user is fully informed, voluntarily consents, and agrees. It also determined that the primary function of the app was vocabulary lookup, meaning that the user's phone number was not necessary for the function.

The court deemed the app's behavior as excessive collection of personal information. By supporting Ma's demand, it demonstrated the judiciary's strong stance against violations of consumer rights.