TikTok’s livestreaming sales recognized as E-commerce

by Karen Wang

Recently the Haidian People’s Court of Beijing issued the very first case on the livestreaming platform as E-commerce platform under the scene of livestreaming sales. Let’s see what the Court says!

Is TikTok an E-commerce platform?

The defendant Company A has carried an internet marketing campaign through the function "Merchandise Window" developed by TikTok. The user makes orders directly by clicking on the "Merchandise Window" and enjoys the shopping by clicking the shopping cart on TikTok while watching the livestreaming sales.

Based on this fact, the Court held that TikTok, also part of the litigation as the defendant B, has provided Company A with services such as deal making and information post, and provided a platform for Company A to launch transactions with third parties. 

In addition, according to the Administrative Measures for Livestreaming Marketing (for Trial Implementation), the platforms that provide livestreaming services in livestreaming marketing, including internet livestreaming service platforms, internet audio and video service platforms, E-commerce platforms, etc., can be called livestreaming marketing platforms. Therefore, TikTok is also a livestreaming marketing platform.

What is reasonable duty of care of E-commerce platform?

According to the E-commerce law, an intellectual property right owner believes that its intellectual property right has been infringed, the right owner shall notify the operator of the e-commerce platform to take necessary measures such as deletion, lock, termination of transactions and services to prevent the infringement by submitting preliminary evidence of infringement.

If the necessary measures are not taken in time, the operator of the e-commerce platform will bear joint and several liability with the operators on the E-commerce platform. It means that the operator of the e-commerce platform must take necessary measures to prove that it has fulfilled its reasonable obligations for exemption, otherwise it will face the risk of joint liability.

In practice, the boundary of reasonable obligation of E-commerce livestreaming sales has always been an important factor to determine whether the operator of the e-commerce platform shall bear the joint liability for infringement.

The Court held that due to the particularity of E-commerce activities, it is not appropriate to adopt too strict pre-examine standards. Instead, it should make a comprehensive judgment on 

• whether the operator of E-commerce platform has established an pre-access mechanism for livestreaming sales, 
• whether the livestreaming marketing management norms or platform conventions have been specified and made public, 
• whether the examination of qualification and goods of operators in livestreaming has been carried out, 
• whether the intellectual property protection rules have been established, and 
• whether a complaint reporting mechanism has been established.

In this case, TikTok has formulated and publicized the user service agreement, privacy policies and intellectual property infringement notification acceptance processes, which clearly stipulates in its user service agreement that if anyone infringes intellectual property of any third party in the use of TikTok, the TikTok operator has the right to remove the suspected infringing content after receiving the preliminary evidence of infringement submitted by the complainants, including identification materials, ownership certificate, basic materials constituting infringement (i.e. effective judicial judgment, patent infringement comparison report, etc.), and links of suspected infringing goods names, etc.

At the end, the Court held that the TikTok operator has made reasonable duty of care, take the measures to remove the goods off the shelves and should not bear joint liabilities.

In conclusion, even if the Court clears that it is not appropriate to adopt too strict pre-examine standards for E-commerce platform, (which means that the pre-examine burden of E-commerce platform to the operators on the platform will be reduced from perspective of the Court), however, a kind remind is that it is better for all E-commerce platforms still take more stricter responsibilities for the pre-examination of goods or services sold or provided in the livestreaming activities.