Legal Duties and Tortious Liability of Third-Party E-Commerce Platforms

Abstract

E-commerce is an important driver of the Chinese economy, with the motto “he who owns the platform owns the world” attesting to its importance. However, e-commerce platforms also pose unique legal challenges. In China, they are either third-party or self-trading, with elucidation of the former’s legal obligations and tortious liabilities being the concern of the present article. The treatment of e-commerce platforms has undergone a profound transformation in Chinese jurisprudence, with traditional counter-space rental and commission theory giving way to an independent legal status. With reference to the latest draft of the Chinese E-Commerce Law and key cases, this article offers an in-depth analysis of the legal obligations borne by third-party e-commerce platforms. These include: an ex ante duty of due diligence, duty to provide technical safeguards, promulgate fair trading rules, store information, supervise in the course of trading, protect user privacy and data, and respect the consumer’s right to be forgotten. These obligations balance the rights and interests of third-party e-commerce platforms, their users and society at large. Since e-commerce traders are able to exert a material influence on the rights and interests of users through advertisements, the reputation system and ranking, it is appropriate that they be stripped of technical neutrality in the transaction. Rather, in the event that their breach of legal obligations incurs tortious liability, it is only proper that they shoulder a commensurate burden in accordance with the principle that risk is consistent with responsibility. The ‘safe harbor’ and ‘red flag’ principles contained in Articles 36(2) and (3) of China’s Tort Liability Law are instructive in imputing liability. Although third-party e-commerce platforms are currently governed through a patchwork of laws and regulations, the Chinese National Peoples’ Congress has nevertheless resolved to draft the specialist E-Commerce Law, acknowledging the industry’s legal importance. We should remain keenly attentive of legislative efforts, and see what specific provisions concerning third-party e-commerce platforms are made in the future E-Commerce Law.