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The first anchor "compensation" case in the live streaming industry has sparked heated discussion

Amid constant turmoil, how can live streaming e-commerce remain evergreen?

Recently, Luo Wangyu, a well-known anchor known as the "No. 1 Beauty Brother" on Douyin, released a video announcing that he and his partner organizations will jointly refund users who purchased CSS Olive Essence on his account, involving a compensation amount of 150 million yuan. This is the first anchor "compensation" case in the history of domestic live streaming sales, which once again made the industry's existing false propaganda and quality problems the focus of public opinion.

False advertising is common

It is understood that the incident originated from the "false advertising of olive oil" incident on February 24 this year. The blogger "Da Hu Class Representative" sent six products, including the "CSS Olive Oil Essence" that Luo Wangyu had promoted, to relevant laboratories and the Beijing Institute of Inspection and Quarantine. The results of both tests showed that the two ingredients oleuropein and hydroxytyrosol were not detected in the "CSS Olive Oil Essence".

The controversy over the anchor's false propaganda has been spreading for several months. Luo Wangyu has lost over one million fans, and the decision to "quit the Internet" for a period of time has cost him a lot.

In fact, in recent years, there have been many cases of anchors "turning over" in bringing goods. Cao Lei, vice president of the Live E-commerce Working Committee of the China General Chamber of Commerce and director of the E-commerce Research Center of the China Internet Network Information Center, said that live e-commerce has experienced a period of wild growth. At that time, the field was full of many low-priced "three-no products". Consumers' "anti-counterfeiting" behavior is conducive to regulating the development of the industry, forcing merchants, anchors, and MCN organizations to conduct self-examination and self-correction. Crazy Little Yangge, Dongfang Selection, Simba, Yu Dagongzi, Luo Yonghao, Lieer Baby and other live broadcast rooms have all experienced "anti-counterfeiting". These top anchors can basically admit their mistakes and bear corresponding responsibilities afterwards.

Data released by the State Administration for Market Regulation in March showed that the scale of the live e-commerce market has increased 10.5 times in the past five years, and the number of complaints and reports about live streaming sales has increased year by year, with an increase of 47.1 times in five years. Products without any products, mismatching of goods with the ones described, and difficulties in returns and exchanges are all issues that have been the focus of complaints.

From the Estee Lauder empty cream bottle incident, to the "mismatched goods" controversy over internet celebrity Xiao Yangge's beef rolls, to the "Oriental Selection" white shrimp incident, the risks and rights protection difficulties in live streaming sales are not uncommon.

On December 12 last year, the well-known anti-counterfeiting expert Wang Hai broke the news to the media that according to inspection and verification, the foam rubber and plastic material in the insole of the Xiaomi S-mibu children's shoes sold in Xiao Yangge's live broadcast room measured 16.187% of phthalates, which exceeded the standard by 161 times, and the solid rubber and plastic material in the outsole measured 12.48% of phthalates, which exceeded the standard by 124 times.

This year's CCTV "3.15" Gala exposed the fake Meicai Kourou made by "Caotou Rou". Afterwards, Dongfang Zhenxuan and Xiao Yangge were both involved in controversy for promoting the product, triggering a crisis of trust. Recently, Li Jiaqi and Xiao Yangge were involved in the authenticity controversy of Hetian jade. They were "exposed" for selling fake Hetian jade with fake identification certificates and deceiving consumers. However, Meiwan and the brand denied selling fake Hetian jade.

The "Annual Report on Public Opinion on Consumer Rights Protection in Live Streaming (2023)" jointly released by the China-Singapore Jingwei Research Institute and other units shows that false propaganda ranks first in public opinion on consumer rights protection, followed by product quality issues. After an in-depth analysis of 9 major e-commerce platforms such as Douyin and Kuaishou and 17 head anchors including Crazy Xiao Yangge and Li Jiaqi, the report pointed out that live streaming, as an emerging consumption model, has the characteristics of novel models, diverse subjects, and huge traffic, but because of the complex legal relationship and difficulty in supervision, it has become a shortcut for some illegal businesses to obtain improper benefits. Moreover, because the head anchors enjoy the huge traffic granted by the platform, they are more likely to cause public opinion accidents, and their rights protection public opinion is basically consistent with their sales volume and personal influence.

Consumers call for industry regulatory solutions

In Cao Lei's opinion, "anti-counterfeiting" incidents in live streaming e-commerce are common, but it is rare for the anchor to personally refund the money. This incident can be regarded as the first case of "compensation" by the anchor in the history of live streaming e-commerce in China.

Dong Yizhi, a lawyer at Shanghai Zhengce Law Firm, believes that Luo Wangyu's initiative to take responsibility is worthy of recognition. However, from a legal perspective, the incident is still not fully defined because the two parties have not yet reached the judicial process.

Li Min, senior partner of Shanghai Han Sheng Law Firm, analyzed that in this incident, if CSS refused to pay compensation, Luo Wangyu had the right to sue the company to protect the rights of consumers. If Luo Wangyu knew or should have known that the product involved false advertising before promotion and still promoted it, Luo Wangyu would bear joint and several liability with the actual seller. If Luo Wangyu was not aware of it in advance, as long as he could provide sufficient evidence to prove that the product had quality problems and fulfilled his due obligation to inform, Luo Wangyu would likely receive support from the court and CSS would eventually have to bear the liability for compensation.

"However, even if Luo Wangyu wins the case, CSS may still appeal. In this case, whether he can win the case in the end depends on the specific case and the court's ruling. In general, the responsibility for this matter should be borne by CSS, the manufacturer of the product with quality problems." Li Min added, "Luo Wangyu's initiative to refund consumers is worthy of recognition, but whether he can successfully recover the compensation still requires further legal proceedings."

It is not difficult to see that the process of handling disputes will be long and difficult, and the anchor's reputation will also be hit. Li Min believes that for live broadcast anchors, they must fulfill their obligations such as truthfully informing consumers and controlling product quality during the sales process. Once a problem occurs, the anchor may need to bear corresponding responsibilities according to the degree of fault, and even bear joint liability with the seller or producer.

This incident also sounded the alarm for the industry. In Dong Yizhi's view, there is a very important logic behind this, that is, the live broadcast industry is constantly strengthening supervision. It can be seen that in recent years, relevant departments have issued a number of policies to regulate the live broadcast industry, and the implementation measures will be further refined in the future. "Any anchor, whether a top anchor or a small anchor, must adhere to the bottom line of compliance. Fully respecting consumers is the way to survive."

The "Regulations for the Implementation of the Consumer Rights Protection Law" that came into effect on July 1 clearly requires that operators of live marketing platforms should establish and improve consumer rights protection systems and clarify consumer dispute resolution mechanisms. However, how the new regulations will be implemented still requires regulatory authorities and the industry to form a mature and consensus-based plan as soon as possible.

Li Min believes that regulatory authorities should strengthen supervision of the live streaming industry, establish and improve consumer rights protection mechanisms, and effectively safeguard the legitimate rights and interests of consumers. Anchors should strictly control product quality, improve product selection capabilities, enhance self-regulatory awareness, and resolutely stop selling products with quality problems; at the same time, they should strengthen communication with consumers when facing problems and actively respond to consumer demands.

■ Our reporter Liu Xuying

Source: International Business Daily