—Analysis on the Possible Legal Countermeasures against Attack on Tmall

Highlights: Tmall is facing the attack from its small merchants for the dissatisfaction on the ons side increase on the annual fee. We would like to analyze the possible legal measure Tmall may take to combat such attack.

Recently, many merchants of Tmall, a subsidiary of the biggest China e-commerce company Alibaba Group, attacked the big merchants on that platform for the upsetting on the higher annual fee with a flood of fake orders and regulatory products return leading to the cripple of the brand sites.

Tmall is a B2C channel of taobao.com, and unlike the C2C transaction on taobao.com, most of its merchants have business license and operation deposit paid in Tmall. The threshold of Tmall was quite low on its early stage, which attracted many small vendors. And the increase on the annual fee this time makes it unaffordable many small vendors, and thus provoked the attack from small vendors for the expression of their complaints.

The attack was organized through YY Yuying, a voice instant messenger designed for online game. There are thousands of attackers gathered in YY’ s chat room with the peak online number once was over 50, 000. Accompanied with the background music, the attackers were unified to attack under the command of voice and text and that made Tmall’ s hot-selling commodities incessant undercarriage.

Tmall and Mr. Jack Ma, the CEO of Alibaba, denounced the attack, claiming no compromise will be made and the police will get into the issue. As professionals of law practices, it came to our mind that what measures may Tmall take to combat such attack? This essay will give you our analysis. While, the statement shall be made first that Bridge IP Commentary has no relation to both parties, and all the analysis made hereto are all with neutral aspect.

According to our experience, there are two main methods Tmall may take to strike the attack, one is to combat the organizer and the active attacker and the other way to paralyze the organization channel.

I. The analysis on striking the organizers and active attackers. According to Tmall’ s statement, it had reported the attack to the police. Generally, the police have two ways to handle the case, the administrative way and the criminal way. Given the relatively long time of civil action, Tmall is not likely to sue the attackers through civil proceedings.

1. The legal basis of the administrative way is the Law of the PRC on Penalties for Administration on Public Security, by which four acts may be punished, namely disruption of public order, impairing the public security, infringing upon personal rights and property, and the disturbing of social management. The severest punishment by the law is administrative detention for 15 days.

The improper conduct against Tmall of fake orders and product return in regulatory time actually harms the commercial interests of Tmall and merchants instead of jeopardizing the public order, public safety and social management. As checked the regulations on property tort, the law mainly focuses on begging, thieving and unwilling purchase, while the so-called attack is actually kinda malicious use of the Tmall’ s rules, therefore, it is difficult to use the administrative way to treat the attack.

2. As to the criminal method, it also remains difficult, for only those conducts of social harmfulness, criminal violations and criminal punishability could be subject to criminal punishment.

Basing on the examination of the code, the possible accusation mainly includes the crime of damage to commercial reputation, illegal business, forced trading, malicious destruction of property, destruction of production and operation. However, all these charges could not cover the attackers’ behavior, and with the principle of legality, it is hard to deal with the attack by the criminal law.

The main obstacle to the punishment is that the so-called attack is under the frame of Tmall rules, and no major direct losses have been produced hereby, thus makes it arguable for criminal punishment on such misconduct. Therefore, Tmall’s intention to combat the fierce protest with the aid of the police becomes very hard.

II. Analysis on the way to paralyze the organization channel. In this case, YY plays an important role in the organization and communication of the attack against Tmall, and the voice or text message was updated in the chat room of YY with more than 30,000 participants. For this reason, the lawyer’s letter is suggested for Tmall to the operating party of YY demanding the pause of the support and service to the tort. As we can see now, on the second day of the attack, YY stated the hope of keeping calm by both sides and to communicate with Taobao within the legal scope.

YY, by estimate, is most likely having received the lawyer’s letter from Tmall, while no intention to pause the service could be perceived from the statement. Then what risks may suffer by YY shall it continued the chatting service. In our opinion, the most risk comes from aiding the tort. Such attack is launched on the call of part merchants, once the tort is judged, the main liability shall be taken by the attackers, and while on the other hand, YY may take the liability of aiding tort for its refusal to pause the service after the official notice from Tmall.

Nevertheless, YY also has its own defense that the so-called attack is launched within the scope of Tmall rule, even such attack is kinda malicious using of the regulation of the payment after delivery or no-reason product return or exchange within 7 days. All these system was originally designed favorable to the buyer for the advantage in competition. With such defense, YY may claim the conduct of small merchants shall not certainly be the tort, and cease of the service may damages the right of free speech though it might protect the interests of Tmall. Therefore, we hold that the court may put YY’s defense into contemplation.

At last, we would like to say that the incident shows the deadlock of Tmall, for it lowered the threshold to stimulate the prosperity in Tmall on the early stage and facing fierce protest when improving the access conditions now. Such dilemma mainly relates to the business strategy of the Tmall which could hardly and impractically be solved by legal counsel of the company.

Now, the temporary cease-fire is achieved between small merchants and Tmall, and at the same time, Tencent (SEHK:700)’s QQ Buy and Shanda(NASDAQ:SNDA)’s pinju.com, the main competitor of Tmall, has introduced the preferential policy to attract the small vendors for the profit from the quarrel. And we also get the news that Mr. Jack Ma has announced the delay on the increase of the annual fee for one year and also the settlement for the small merchants getting back to the platform of C2C.

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Copyright reserved by Mr. You Yunting
Editor-in-Chief of Bridge IP Commentary
Partner & Attorney-at-law of Shanghai DeBund Law Offices
Email: Bridge@chinaiplawyer.com, Tel: 8621-5213-4900,
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Bridge IP Commentary is a website focus on the introduction of commercial laws in China, especially the intellectual property laws. All the posts here are our original works. All news or cases referred here are from public reports, and our comments or analysis are of due diligence, neutrality and impartiality, representing our own opinions only. You may contact us shall you have any opinions or suggestions.

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