The Supreme People's Court has emphasized the importance of regulating commercial marketing practices in the digital era, urging judges nationwide to help establish clear compliance guidelines for platform operators through their rulings.

In releasing details of five significant cases on Monday, China's top court highlighted the need to effectively resolve disputes related to the platform economy to better protect consumers' rights and promote healthy industry development.

"The platform economy is a key component of the digital economy and plays a crucial role in developing new quality productive forces," the court said, praising the rapid growth of sectors such as livestreaming e-commerce and short-video platforms in recent years.

However, it pointed to problems including inadequate competition rules and a lack of clear operational guidance in these sectors, saying they have harmed consumers' legitimate interests and disrupted market order.

The SPC said selling goods through livestreaming platforms has provided small and medium-sized enterprises with an important gateway to the digital economy, making lawful and compliant marketing practices essential for sustainable growth. However, it noted that some livestreamers have made biased or misleading product evaluations, resulting in commercial defamation disputes.

A representative case from July 2024 involved a Beijing-based livestreaming company with nearly 30 million followers.

During a livestream, one of its hosts made disparaging remarks about a liquor brand produced by a Chongqing distillery, claiming it contained edible alcohol rather than being traditionally fermented.

The Chongqing company filed a lawsuit, arguing that the comments misled consumers into believing its liquor was not made from pure grains, thereby damaging its reputation.

The Beijing company argued that the remarks were spontaneous responses to viewers' questions during the livestream.

After hearing the case, a grassroots court ruled that while livestreaming commerce is a commercial activity in which hosts may comment on products, such remarks must not infringe on the legitimate rights of others or undermine fair competition. It said livestreamers should exercise due care when discussing competing products.

After examining the evidence, the court found that the host's remarks created the false impression that the distillery's products were of inferior quality, constituting misleading information.

The court ultimately ruled that the Beijing company had committed commercial defamation and ordered it to pay 300,000 yuan ($44,400) in compensation and legal costs to the Chongqing company.

The SPC cited the case as a model for regulating commercial conduct in the livestreaming sector, stressing that livestreamers must ensure their comments are truthful, accurate and comprehensive to avoid misleading the public.

"The decision also helps raise legal compliance awareness among platform operators and businesses, promotes a fair and competitive market environment, and supports the sound development of the livestreaming marketing industry in the digital economy," the court said.

The other four cases involve issues including virtual property and e-commerce transactions, reflecting judicial efforts to clarify platforms' responsibilities in online consumption and account transfers.

The SPC called on judges nationwide to ensure the legality and compliance of platform transactions, operations, competition and asset management. It also pledged to continue improving judicial rules to provide a stable, fair, transparent and predictable business environment, fostering innovation and the healthy development of the platform economy.