The rise of livestreaming e-commerce in China and challenges for regulation: A critical examination of a landmark case occurring during COVID-19 pandemic

Abstract

The devastating COVID-19 pandemic saw that the livestreaming e-commerce, which is a brand-new e-commerce model by combining online shopping with livestreams, emerged prominently in China. It shares some commonalities with other forms of e-commerce and traditional shopping channels like TV shopping one way or another, but the former is a disruptive iteration of the latter. Nonetheless, the arrival of livestreaming e-commerce also brings about significant regulatory challenges, due to opportunistic livestreamers coupled with other issues, resulting in all kinds of market failure acts, with false or misleading representations figuring most prominently. This is reflected by a landmark case occurring during the pandemic, in which Xin Ba as one of the most influential livestreamers sold cubilose products via Kuaishou, China's leading livestreaming e-commerce platform, in a false or misleading way. When the cubilose products touted as luxury foods were later proven to contain nothing but water and sugar, it attracted considerable public attention due to the large number of consumers affected and huge transactions it generated. This scandal was followed by an administrative investigation and a civil investigation. The Paper has an in-depth analysis of legal issues surrounding these investigations mainly centered on how Xin Ba as a livestreamer is liable for what, and finds that the laws applied to livestreaming e-commerce demonstrate legal inconsistencies and gaps, which a corresponding legal reform is proposed to address. As a way forward, the Paper also examines the issue of platform liabilities, a topic under-discussed under the landmark case. Upon the above deep analyses, the Paper concludes.