Li Jiaqi is on the hot search list again, this time involving JD.com and Haishi. On October 24, JD.com’s sales staff posted on WeChat Moments that JD.com had received a lawyer’s letter from brand owner Hai’s. The brand complained that because the JD price of a certain Hai’s oven was lower than the price in Li Jiaqi’s live broadcast room, it violated the “reserve price agreement” they signed with Li Jiaqi.
Pictures from the Internet
According to some screenshots of the lawyer's letter posted by it, Hai's accused the JD platform of breach of contract and revised pricing, resulting in zero or even negative sales profits for the company's products. At the same time, it also caused passive breach of contract in cooperation contracts between Hai's and other customers, which may trigger the risk of huge compensation.
The JD salesperson said that the Hai's product was JD's self-operated product and its price was low because JD subsidized it out of its own pocket. He also questioned the anchor's "choose one" behavior and called on relevant departments to intervene to manage the "pseudo-lowest price on the entire network."
The incident sparked heated discussions as soon as it was exposed. Related topics such as "JD.com's sales staff publicly urged Li Jiaqi to choose one of the two" and "Is the minimum price agreement in Li Jiaqi's live broadcast room reasonable?" were on Weibo's hot searches.
Subsequently, both Li Jiaqi's companies, Midea One and Haishi, denied the existence of a "low-price agreement." JD.com executives publicly expressed their support for JD.com's sales staff who had previously called Li Jiaqi to "choose one of the two" in WeChat Moments. The "Crazy Little Brother Yang" live broadcast room also participated, angrily criticizing Li Jiaqi for holding merchants hostage to control prices and inventory.
Many parties held their own opinions, and the floor price agreement suddenly turned into a Rashomon incident. Is the "low-price agreement" in Li Jiaqi's live broadcast room reasonable? Does this behavior constitute "choosing one of the two"? Does JD.com constitute a breach of contract? Let’s take a look at what lawyers have to say about these topics that consumers are concerned about.
What is a "floor price agreement"?
"Reserve price agreement", also known as "minimum price agreement", is an agreement between a manufacturer or supplier and a dealer. Under this agreement, the manufacturer or supplier stipulates that the dealer cannot sell its product or service below a certain price. Simply put, it sets the lowest price for a product in the retail market.
Zhang Cuiping, a lawyer at Beijing Huacheng Law Firm and a director of the Sports Law and Olympic Legal Affairs Research Association of the Beijing Law Society, told TechWeb, "The floor price agreement can help maintain the image of a high-end brand and prevent its products from being seen as low-priced or low-quality. Since the price will not be too low, dealers may be more willing to provide better sales services for the product, such as better after-sales service or display. At the same time, the floor price agreement also avoids vicious price wars between dealers due to price competition."
At the same time, lawyer Zhang Cuiping also pointed out that the "reserve price" may also be an illusion. This kind of agreement may cause consumers to pay higher than the average market price, thereby limiting price competition among dealers, which is detrimental to consumers and merchants who hope to attract consumers through low-price strategies. Floor price agreements may also violate relevant laws and regulations such as antitrust laws or competition laws.
The "Shanghai Compliance Guidelines for Online Live Marketing Activities" issued by the Shanghai Municipal Administration for Market Regulation clearly states that anchors should not require intra-platform operators (e-commerce operators who sell goods or provide services through online live broadcasts) to sign "minimum price agreements" or other unreasonable exclusive mandatory terms. At the same time, in promotion activities, "the lowest price in the entire network" or "the lowest price in history" must not be used as a selling point for the live broadcast.
In this incident, both ONE and Heidegger denied the existence of a "low-price agreement." On the afternoon of October 24, US ONE responded to the media that the contract signed between Li Jiaqi’s live broadcast room and the brand did not involve the “lowest price in the entire network” and “choose one of two” binding clauses. The pricing power of the products in the live broadcast room lies with the brand.
In the evening of the same day, Hai's official Weibo issued a statement stating that the Hai's brand had not signed any "reserve price agreement" with the channel mentioned by the salesperson. This was purely false information and was being spread by JD.com's sales personnel to mislead the media and netizens.
However, the responses from ONE and Hai's did not calm the storm. On the 24th, in the "Crazy Little Yang Brother" live broadcast room, Dayang Brother broke the news that Li Jiaqi controlled prices and inventory, which resulted in most of the big names in Xiao Yang Brother's live broadcast room being removed from the shelves. Brother Dayang said that he had a hundred units in stock, and Li Jiaqi sold seventy or eighty units. The merchant would definitely cooperate with him, and if he sold more, he would have the right to hold the merchant hostage. Brother Xiao Yang said that the price of a certain big brand is lower than that of Li Jiaqi, so he cannot sell it and the product link can only be downloaded. On the 25th, "Brother Yang angrily criticized Li Jiaqi for holding businesses hostage" ranked first in Weibo's hot searches, with 640 million topic views.
In addition, JD.com’s home appliances and home furnishing executives also resigned. They publicly supported the JD.com sales staff who had previously called Li Jiaqi to “choose one of the two” in WeChat Moments, and said, “The WeChat Moments posted yesterday by our small home appliance purchasers is exactly what every employee in our business department insists on safeguarding the rights and interests of consumers at low prices.” Epitome. Faced with the chaos of some leading anchors depriving consumers of the right to enjoy truly low prices for their own selfish interests, we must resist the overbearing terms of the "network-wide lowest price" agreement! All partners in the Home Appliances and Home Furnishings Division will truly let consumers feel the authenticity of JD's prices!"
Previously, Sina Technology exposed a "US ONE Live Broadcast Promotion Service Contract." The contract shows that the brand needs to ensure that the value of the gift is the highest value under the same conditions within the scope of the guarantee within the guarantee period. And within the guarantee period, the brand needs to ensure that the promotional intensity provided by the designated expert under all promotional services agreed by both parties under the framework of this contract is the maximum intensity under the same conditions within the guarantee scope during the guarantee period. In the event of a breach of contract, the brand needs to refund five times the price difference to consumers, compensate ONE with liquidated damages of RMB 2 million, and bear all expenses and losses incurred due to the refund of the price difference.
The contract stipulates that the scope of the best price is Taobao platforms (including but not limited to Taobao/Tmall stores, anchor live broadcasts and other Taobao content channels), other e-commerce platforms and offline channels. The best price guarantee period is 60 days before and after the actual date of the live broadcast promotion service (121 days in total). In addition, within the guarantee period, the brand must also ensure that the final transaction price of the promotional objects within the corresponding planned sales volume under all promotion services provided by the designated experts is the lowest price within the guarantee range during the guarantee period.
The incident is still continuing to unfold, and ONE and Heidegger have not yet made any further response. Regarding the authenticity of the "Mei ONE Live Broadcast Promotion Service Contract" exposed by Sina Technology, Mei ONE has not yet made the latest statement.
How to define "choose one of two"?
"Choose one of the two" in the platform economy usually refers to certain large platform companies requiring suppliers or service providers to only provide products or services on their platforms in order to maintain their market dominance and not to provide the same products or services on other competing platforms.
Lawyer Zhang Cuiping said that the "choose one from two" approach inhibits market competition to a certain extent, may lead to damage to consumer rights and restrictions on innovation, and is not conducive to long-term market stability. For suppliers or merchants who rely on platforms, they may be afraid to cooperate with other platforms for fear of being punished, which will limit their business expansion and growth.
"The brands or products discussed this time are listed on both platforms. In theory, there should be no 'choose one' issue involved. The relevant parties only have disputes over price and whether there is a breach of contract." Lawyer Zhang Cuiping said.
She further pointed out that to see whether the behavior is reasonable, it is necessary to study the terms of the contract signed by Li Jiaqi and the brand, as well as the terms of the contract signed by JD.com and the brand. The contract is relative, that is to say, the contract signed between Li Jiaqi and the brand cannot restrict JD.com. Therefore, the core of whether the behavior is reasonable lies in whether the contract signed between the brand and JD.com contains legal and compliant binding clauses to clarify that the brand has the right to determine the final selling price of the product to consumers on JD.com, or that JD.com does not have the right to subsidize sales, change prices, etc. It should be noted that this is the "final selling price pricing power for consumers", not the brand's supply pricing or JD.com's purchase pricing.
In this incident, JD.com’s purchasing and sales personnel stated that the Hai’s products involved were JD.com’s self-operated products, and their low prices were due to JD.com’s out-of-pocket subsidies. Hai's stated in the statement that "the losses of each oven sold at a reduced price will be borne by the Hai's brand, not the platform's subsidized expenses as claimed by JD.com." "The agreement signed by the Hai's brand and the JD.com platform clearly states that business operations must be based on consensus reached by both parties, and JD.com does not have the right to modify prices without authorization."
Hai's also said that in order to ensure the rights and interests of consumers, the Hai's brand priced the oven according to the marketing rhythm of each platform during the Double Eleven period and set the lowest sales price across the entire network. The JD purchaser and salesman did not negotiate with the brand and unilaterally lowered the product price without authorization. The company refused after the brand clearly expressed its disagreement. If communication fails, the only option is to send a lawyer's letter to the platform through legal means.
Jingdong and Haishi each hold their own opinions, which one is right and which one is wrong? Lawyer Zhang Cuiping said that it is impossible to make a judgment without seeing the original text of the contract. Market entities have autonomy. If one day they really go to court, the contract terms between the brand and BOE, and between the brand and Li Jiaqi, will become an important basis for the court to determine whether there is a breach of contract.
Lawyer Zhang Cuiping believes that the commercial entities of both parties can handle and resolve the matter through private communication. If it cannot be resolved, legal remedies can be used. There is no need to occupy public resources to discuss the matter. But now that this matter has become known to the public, and now it happens that Double Eleven is approaching, should we think about it from a different angle?
access:
Jingdong Mall