Online shopping for a refrigerator with poor quality—should the livestream host bear responsibility?

Compiled from: Yishui Court

Case Review

Liu, a livestream host on an internet platform, signed a "Livestream Sales Agreement" with Company A. On the night of June 8, Liu sold a double-door refrigerator produced by Company A during a livestream. Zhang purchased the refrigerator through the livestream. On the afternoon of June 11, Zhang received the goods and found scratches on the refrigerator's exterior. Shortly after powering it on, the refrigerator malfunctioned, causing food stored inside to spoil. After inspection by after-sales staff, the issue was determined to be a main control board failure. Zhang contacted Liu via the platform to demand compensation, but Liu refused, claiming the product was produced and sold by Company A and that he was merely a livestream host. On June 28, Zhang filed a lawsuit against Liu and Company A, demanding a return of the product and compensation for losses totaling 2,500 yuan.

The court held that, according to Articles 2 and 9 of the E-Commerce Law of the People's Republic of China, e-commerce refers to business activities involving the sale of goods or provision of services through information networks such as the internet. E-commerce operators include natural persons, legal persons, and unincorporated organizations engaged in such activities, including platform operators, in-platform operators, and those selling goods or providing services through self-built websites or other network services.

This case is a typical business activity involving the sale of goods through information networks such as the internet. If a dispute arises between the buyer and seller, Article 58, Paragraph 3 of the E-Commerce Law of the People's Republic of China applies. Consumers may demand that the e-commerce platform operator bear primary compensation liability or directly demand compensation from the in-platform operator.

In this case, the plaintiff Zhang sued Company A for compensation, which is legally justified, and the court supported this claim. The key issue in the dispute was whether the livestream host should compensate the plaintiff for the losses.

The court held that Liu was not an employee of Company A but was hired by Company A to promote its products. The two parties signed a written "Livestream Sales Agreement." Liu's role was similar to that of an advertising endorser, aimed at advertising for Company A. Article 18, Paragraph 2 of the E-Commerce Law of the People's Republic of China stipulates that e-commerce operators sending advertisements to consumers must comply with the relevant provisions of the Advertising Law of the People's Republic of China. Therefore, whether Liu bears compensation liability depends on whether he violated the Advertising Law's provisions that "advertisements shall not contain false or misleading content, nor deceive or mislead consumers." If Liu published false advertisements that deceived or misled consumers into purchasing goods, he should bear compensation liability.

However, based on the video evidence of Liu's livestream sales retrieved by the court, Liu did not exaggerate the products during the livestream, nor did he use deceptive or misleading language to induce consumers to purchase. Therefore, Liu is not liable for compensating the losses of the plaintiff, Zhang.

The court ultimately ruled that Company A must process a return for the plaintiff Zhang, refund the payment, and pay 2,000 yuan in compensation, while Liu bears no liability for compensation. Neither party appealed the first-instance judgment.

"E-Commerce Law of the People's Republic of China"

Article 2

This Law applies to e-commerce activities within the territory of the People's Republic of China. For the purposes of this Law, "e-commerce" refers to business activities involving the sale of goods or provision of services through information networks such as the internet. Where laws or administrative regulations provide otherwise for the sale of goods or provision of services, those provisions shall prevail. This Law does not apply to financial products and services, nor to the provision of news information, audio and video programs, publications, cultural products, or similar content services through information networks.

Article 9

For the purposes of this Law, e-commerce operators refer to natural persons, legal persons, or unincorporated organizations that engage in business activities of selling goods or providing services through information networks such as the Internet, including e-commerce platform operators, operators on the platform, and e-commerce operators who sell goods or provide services through self-built websites or other network services. For the purposes of this Law, e-commerce platform operators refer to legal persons or unincorporated organizations that provide services such as online business premises, transaction matching, and information release for two or more parties in e-commerce, enabling them to independently conduct transaction activities. For the purposes of this Law, operators on the platform refer to e-commerce operators who sell goods or provide services through e-commerce platforms.

The Advertising Law of the People's Republic of China

Article 56

Where, in violation of the provisions of this Law, false advertising is published to deceive or mislead consumers, causing damage to the legitimate rights and interests of consumers who purchase goods or receive services, the advertiser shall bear civil liability in accordance with the law. If the advertising operator or advertising publisher cannot provide the true name, address, and valid contact information of the advertiser, consumers may request the advertising operator or advertising publisher to make compensation first.

For false advertising involving goods or services related to the life and health of consumers, causing damage to consumers, the advertising operator, advertising publisher, and advertising spokesperson shall bear joint and several liability with the advertiser.

For false advertising involving goods or services other than those specified in the preceding paragraph, causing damage to consumers, if the advertising operator, advertising publisher, or advertising spokesperson knew or should have known that the advertising was false but still designed, produced, acted as an agent, published, or made recommendations or endorsements, they shall bear joint and several liability with the advertiser.

[4] Author's Opinion

Live streaming e-commerce is an emerging business model with regulatory loopholes and irregularities. Currently, there are two main popular live-streaming sales models: one involves store owners, executives, staff, or directly hired dedicated streamers promoting goods or services, known in the industry as store live streaming; the other involves influencers or celebrities registering accounts on live-streaming platforms, signing agreements with various online stores to promote their products.

In the first scenario, when consumers seek compensation after purchasing goods, they can directly demand compensation from the seller on the platform, as the streamer is part of the online store.

In the second scenario, the streamer is not the seller themselves, and their role is similar to that of an advertisement publisher or endorser. Therefore, whether they bear compensation liability should be determined according to the relevant provisions of the Advertising Law of the People's Republic of China. If the streamer engages in false advertising, deceiving or misleading consumers into making purchases, they shall bear joint liability with the seller; otherwise, they are not liable for compensation.

In both cases, consumers can directly demand compensation from the platform operator, who may then seek recourse from the platform's seller after fulfilling compensation.