Nowadays, live stream selling is becoming more and more common, but selling counterfeits thereby also arises. In August 2020, a case in which an online anchor was taken away by the police on the live broadcast attracted extensive attention. Recently, the People's Court of Shanghai Yangpu District made a judgment that the online anchor Liao was sentenced to fixed-term imprisonment of three years and four months and fined 400,000 RMB for the crime of selling commodities bearing counterfeit registered trademarks.

Previously, the procuratorate of Hongkou District accused the defendant Liao and her team of marketing counterfeit clothing, accessories, watches and other goods of Dior, Chanel, Loewe and other brands for businesses by live broadcasting on the e-commerce live streaming platform from March to August 2020, with a sales amount of nearly 700, 000 RMB. The People's Court of Yangpu District of Shanghai pronounced in court that Liao committed the crime of selling commodities with counterfeit registered trademarks and was sentenced to fixed-term imprisonment of three years and four months and a fine of 400,000 RMB. Other members of Liao's team were sentenced to fixed-term imprisonment ranging from 2 to 3 years and 2 months, and a fine ranging from 5,000 to 50,000 RMB.

   In October 2017, Liao signed a contract with a company in Hangzhou to become a sales anchor and opened a live broadcasting studio on the e-commerce platform to sell women's clothes and accessories. With the accumulation of fans, Liao formed a team of about 6 people with a clear division of labor. However, since 2020, in order to get a high commission percentage, some "special" goods had appeared in Liao's live studio. The logos of these clothing were covered, suggesting that they were "the same" with big brands. The price of goods was often only less than one dozenth or even hundredth of that in genuine stores, which was obviously fake commodities with luxury labels. Liao was a disseminator in the link of selling fake products, and the actual source of goods was provided by illegal businesses. The police investigation found that among the hundreds of businesses cooperating with Liao, nearly 30 were suspected of selling fake luxury goods.

Article 214 of China's Criminal Law stipulates that whoever knowingly sells goods with counterfeit registered trademarks and has a large amount of illegal income or other serious circumstances shall be sentenced to fixed-term imprisonment of not more than three years and shall concurrently, or shall only, be fined; if the amount of illegal gains is huge or if there are other especially serious circumstances, he shall be sentenced to fixed-term imprisonment of not less than three years but not more than 10 years and shall also be fined. In addition, online celebrities or stars who make use of their network traffic advantages to falsely publicize the sales of products in the process of live streaming sales with obvious consumer fraud also have to bear the corresponding civil liability for compensation.

On May 25 this year, the Measures for the Administration of Webcast Marketing (for Trial) came into effect, and the responsibilities and obligations of the anchor were further clarified. The Measures stipulates that the live broadcast marketing platform shall sign agreements with the service institutions of the marketing personnel and the operators of live streaming studios, requiring them to standardize the recruitment, training and management processes of live broadcast marketing personnel, and fulfill the obligation to review the content of live marketing, as well as the authenticity and legitimacy of goods and services.

After the introduction of the Measures, e-commerce platforms also attach great importance to it. For example, at the product function level, some e-commerce platforms do not provide operators of the live broadcasting studio with any product function that can tamper with transactions and pay attention to data; use the ability of big data risk control identification to identify and intercept the scalping and speculating behavior organized by the operators of the live broadcasting studio. In addition, in order to further safeguard the rights and interests of consumers effectively, the live streaming content with e-commerce transaction is saved, so as to trace the transaction information in case of transaction disputes.

                                                                                                                        (Adapted from China Fund Newspaper and news of the Paper)



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Ruling Handed Down on Selling Counterfeits by Live Streaming

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