As soon as Double Eleven started, the smell of gunpowder started to rise. The one who was caught in the center of the storm this time was Li Jiaqi, a top live broadcaster. The matter began on October 24, when a JD.com salesperson publicly announced in WeChat Moments that Li Jiaqi was suspected of "choosing one of the two." In the evening of the same day, the relevant person in charge of US ONE responded to reporters from The Paper: Li Jiaqi's live broadcast studio and the Hai's brand have not signed a so-called "reservoir price agreement"; Li Jiaqi's live broadcast studio has never asked the brand to make any choice; the pricing power of Li Jiaqi's live broadcast studio's products lies with the brand.
But the development of the incident was not calmed down by the response. According to an agreement between Mei ONE and the brand that has been circulated on the Internet, Mei ONE requires the brand to give maximum promotion efforts within a specified range, and the best price ranges from 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. In the event of a breach of contract, the brand owner needs to refund five times the price difference to consumers and compensate ONE for liquidated damages.
Coupled with the repeated attacks from JD.com, Xiao Yang Ge, and professional anti-counterfeiters, Li Jiaqi frequently appeared in hot searches, and a storm surrounding e-commerce platforms, leading anchors, and brand merchants was beginning.
So, does the floor price agreement at the center of the storm exist? Do similar agreements constitute a monopoly?
Does a price floor agreement exist?
The first point of controversy surrounding Li Jiaqi is whether the exposed price reduction agreement exists.
"We are much lower than Li Jiaqi, so we can't sell anything. He can run a platform by himself. Some of the big names you want are out of stock. All prices are set by him."
On the evening of October 24, in the live broadcast room of Douyin's top anchor "Crazy Little Yang", the anchors Big Yang and Little Yang publicly attacked Li Jiaqi, saying that because Li Jiaqi held merchants hostage, many big names in Little Yang's live broadcast room were forced to be removed from the shelves.
"If there are 100 items in stock, the merchant must cooperate with the one who sells more, so if it sells more, Li Jiaqi has the right to hold the merchant hostage." The two said.
This accusation implies that Li Jiaqi has signed low-price agreements with a large number of well-known brands. However, a person close to Li Jiaqi told The Paper that the content of the exposed price reduction agreement was untrue. It can be confirmed that Li Jiaqi did not sign a price reduction agreement with any brand during Double Eleven this year.
It is worth noting that many merchants revealed to The Paper reporters that similar price agreements do exist, but the content details are different, and the versions at different times are also different. "In the live broadcast industry, minimum sales prices and high pit fees have become the norm, and merchants are always under pressure." A brand owner said.
The founder of a certain coffee brand told The Paper that when his company cooperated two years ago, he was required to achieve the lowest price for products of the same model and specifications within a short period of time. The time limit was usually around 15 days and no longer than 30 days.
"The lowest price period of 15 to 30 days is acceptable to the brand, and there are no relevant penalty clauses during the cooperation process." The founder said frankly that even if the lowest price agreement was really violated at that time, the head anchor would only ask for an explanation and not high compensation. If it is found to be malicious behavior, it will affect subsequent cooperation.
"The actual situation is not as exaggerated as what is reported online. Of course, we do not rule out the reason for the early cooperation. The contract may have become more stringent now." The founder revealed that not only Li Jiaqi, but almost all live broadcast cooperation with celebrities will have similar price requirements.
This statement was confirmed by many people in the live broadcast industry. "In fact, similar low-price agreements are the norm in the live broadcast industry." A person in the leading live broadcast room told reporters, "But Li Jiaqi has a stronger voice."
Another live broadcast operator told The Paper, “This kind of price agreement has become a routine operation for top anchors and is almost a prerequisite for cooperation between anchors and brands.”
He revealed that brands have almost no say in front of top anchors. “Nowadays, in order to ensure the lowest price for anchors, merchants often provide exclusive sales rights to certain products to top anchors. So when other anchors have no sales rights, naturally there is no such thing as the lowest price.”
Multiple media reported that on October 23, Hangzhou Haishi Intelligent Electrical Appliances Co., Ltd. (also known as "Hishi Oven") reported to the State Administration for Market Regulation in real name, saying that JD.com required the price of its brand products on the JD.com platform to be lower than that of other platforms, and changed the price without permission. It was suspected of constituting abuse of market dominance and horizontal price monopoly, undermining the order of market competition, and requested the State Administration for Market Regulation to investigate and correct it, and required JD.com to compensate for losses.
On October 24, the matter was posted to Moments by JD.com’s sales staff, stating that JD.com had received a letter from Hai’s lawyers complaining that because the JD price of a certain Hai’s oven was lower than the selling price of Li Jiaqi’s live broadcast, it violated the “reserve price agreement” signed between them and Li Jiaqi, and demanded huge liquidated damages.
The staff member claimed that the product was a self-operated product of JD.com, and its price was low because JD.com subsidized it out of its own pocket. He questioned Li Jiaqi's "choosing one of the two" behavior, which was suspected of being illegal.
However, this statement was denied by the brand.
In the evening of the same day, the brand "Hi's Oven" involved in the public opinion war issued a statement saying that it had not signed any "reservation price agreement" with Li Jiaqi, which was purely a rumor.
Hai's Ovens stated that all losses for ovens sold at reduced prices will be borne by the brand, and will not be subsidized by the platform as JD.com said. After the communication failed, Hai's had no choice but to use legal means to send a lawyer's letter to the platform. JD Procurement and Sales further unilaterally changed the price of the product to 50% off without communication, causing serious losses to the brand.
Is it suspected of monopoly and "choosing one of the two"?
With the involvement of many parties including ONE Company and anchor Xiao Yang, the situation has become more complicated and the war has become more intense.
On October 25, a reporter from The Paper inquired about the Tianyancha APP and found that a company owned by "Crazy Little Yang Brother" and a company owned by Meiyang had established a joint venture. The company is called Hangzhou Meiyangyang Technology Co., Ltd. It was established in July 2022, and its legal representative is Wang Teng. Wang Teng is also the legal representative of Hangzhou Meiyihua Brand Management Co., Ltd. The equity panoramic penetration chart shows that the company is jointly held by Tianjin Jiarui Enterprise Management Partnership (Limited Partnership), Hefei Sanyang Venture Capital Co., Ltd., Hangzhou Chenshi Enterprise Management Co., Ltd., and Hangzhou Meiyihua Brand Management Co., Ltd., of which Hefei Sanyang Venture Capital Co., Ltd. is a company owned by Crazy Little Yang Ge, and Hangzhou Meiyihua Brand Management Co., Ltd. is 29.6% held by Hainan Meiyi Investment Co., Ltd., a subsidiary of Meishi.
However, neither Crazy Young Brother Yang nor Mei ONE responded to this matter.
In addition to Crazy Young Brother Yang, JD.com also continued to bombard Li Jiaqi, calling it "the dominant clause in the entire network's lowest price agreement."
On October 25, Li Shuai, head of home appliances and furniture at JD.com, called in his WeChat Moments: "Some leading anchors deprive consumers of the right to enjoy truly low prices for their own selfish interests. We must boycott the overbearing clauses of the entire network's lowest price agreement."
"After the platform subsidizes itself, brands protest or are dissatisfied every year. It's just a matter of more or less." E-commerce analyst Li Chengdong told reporters, "Other well-known e-commerce platforms were also criticized by brands for low prices before, but they didn't mention it later because low prices have become the trend of e-commerce competition."
"Big brands often cover all channels, and their pricing is extremely important. Once a platform gives the lowest price, it will be a big problem for other channels. In terms of competing for low prices, conflicts between leading anchors, e-commerce platforms, and merchants often occur." Li Chengdong believes.
Is Li Jiaqi suspected of monopoly and "choosing one of the two"? In this regard, many legal professionals and industry experts agree that no clear conclusion can be drawn yet.
"To a certain extent, the top anchors must have their own reasons, because the fundamental reason for their livelihood is to fight for the rights and interests of consumers. If the brand does not abide by the price agreement, its reputation will be affected, so it is justified to pursue it. And in this incident, it should be the brand and the top anchor who made the agreement first." Cui Lili, a professor at the Department of Digital Economics at Shanghai University of Finance and Economics, told reporters. Therefore, even if the content of the agreement seems to be somewhat unequal, as long as the brand approves it, it is not an "either-or".
Cui Lili believes that in this dispute, the platform side interfered with the brand's terminal pricing. This situation basically did not exist in the past. Therefore, to be cautious, it is best for the brand side to define the market price within its controllable range when making an agreement with the super leader.
"Li Jiaqi may be just a promoter of goods, not a seller, and does not belong to a large online platform, so it may not reach the level of antitrust." Xia Hailong of Shanghai Shenlun Law Firm believes that the behavior of requiring the lowest price has violated relevant regulatory regulations. For example, the "Shanghai Compliance Guidelines for Online Live Marketing Activities" clearly stipulate that live broadcast room operators should not require operators within the platform to sign "minimum price agreements" or other unreasonable and exclusive mandatory terms.
Jiang Xueyong, a lawyer at Yuanze Law Firm, told The Paper that the Anti-Monopoly Law has specific standards for identifying monopolistic behavior, which mainly look at two points: whether it has a dominant market position and whether there is abuse of a dominant market position. "Whether Li Jiaqi constitutes a monopoly depends on the evidence obtained by the law enforcement authorities and the results of the investigation. It is difficult to draw a conclusion based on the analysis of specific issues."
Regarding the current floor price agreement being circulated, Jiang Xueyong said that it is still difficult to specifically determine whether a monopoly has been established. However, the existence of this agreement and other substantive behaviors, if combined with the determination of market dominance, may be deemed an abuse of market dominance and thus constitute a monopoly.
Zhai Wei, executive director of the Competition Law Research Center of East China University of Political Science and Law, said in an interview with The Paper that all parties involved hold different opinions. If a "floor price agreement" does exist, it may constitute a vertical monopoly agreement, but it does not constitute a "choose one" behavior.
Zhai Wei pointed out that from the perspective of antitrust law, "choose one of the two" refers specifically to the abuse of market dominance in the form of "restricted transactions". The premise for an enterprise to constitute a "choose one" behavior is that it has a dominant position in the relevant market. Although Li Jiaqi is one of the leading anchors, in the online live streaming market, competition among leading anchors is extremely fierce, and Li Jiaqi occupies a smaller market share. Therefore, Mei One does not have a dominant position in this market, and it is impossible to constitute a "choose one" behavior. However, the "floor price agreement" is suspected of constituting a vertical monopoly agreement that limits the minimum resale price. According to the Anti-Monopoly Law, if a company can prove that its vertical monopoly agreement that sets a minimum resale price does not have the effect of excluding or restricting competition or meets the exemption criteria, then this behavior is not prohibited. Otherwise, it may be subject to antitrust penalties due to the implementation of vertical monopoly agreements.
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