DeHeng Successfully Represented the No.1 Case of 2021 Top Ten Intellectual Property Cases in Zhejiang  

2022-04-28

The unfair-competition dispute between Meituan and ele.me, represented by DeHeng, has been recently concluded after the first trial by Wenzhou Intermediate Court and the second trial by the Higher People's Court of Zhejiang in the past nearly two years. DeHeng lawyers safeguarded the lawful rights of the client and won the desired outcome.

Case summary：

In 2019, Wenzhou Branch of Shanghai Lazhas Information Technology Co., Ltd. (the operating entity of the ele.me platform) negotiated an exclusive strategic cooperation deal with a merchant in Wenzhou and promised to offer preferential treatment, but asked the merchant to close its business on Meituan's food delivery platform. After refusing the offer, the merchant was forced to shut down its online shop on the ele.me platform, and its store was reopened only after a complaint was filed. Sankuai Online Technology Co., Ltd. (the operating entity of the "Meituan" platform) considered that the above acts constituted unfair competition, and then mandated DeHeng's Hangzhou Office to represent it in this case, demanding Shanghai Lazhasi Information Technology Co., Ltd. and its Wenzhou Branch to compensate for the losses, and publish a statement to eliminate the impact. 

Since they accepted the mandate, lawyers Sun Bin and Ying Zhenfang have worked on the case for nearly two years, with the first trial heard at Wenzhou Intermediate Court and the second trial at the People's Higher Court of Zhejiang. Finally on January 7, 2022, the court made the final judgment: it found that Lazhasi forced the merchant to stop operations on the "Meituan Delivery" platform by the technical means of closing the merchant's store on its platform, which affected the freedom of choice of the merchant and consumers, hindered the normal operations of the Meituan Delivery platform legally provided by Sankuai Online Technology, undermined the Internet competition mechanism and distorted the competition effect. It constituted an act of unfair competition according to the criteria stipulated in Item 2, Paragraph 2 of Article 12 of the Anti-Unfair Competition Law of China: "force users to close the network services legally provided by other operators."  

The court held that, in order to obtain exclusive trading opportunities, online platform operators took punitive measures such as adjusting preferential fee rates, not allowing additional services, not signing agreements, and forcing the closure of online shops, to induce or force merchants on their platform not to cooperate with other platforms. Such acts violate the principle of good faith and business ethics in the Internet field, deprive merchants of their free choice, infringes upon the lawful rights of other operators and consumers, diminish social welfare, and destroy the open, shared, fair and orderly competition order of the Internet, and thus constitute unfair competition.

This case was included as the first among the "2021 Top 10 Intellectual Property Cases in Zhejiang" published by the People's Higher Court of Zhejiang.