On 23 November 2023, the 2nd Global Digital Trade Expo - Data Factor Governance and Marketization Forum was held in Hangzhou. The theme of this forum is “Innovative Data Factor Circulation, Enabling Real Economic Development”. Chen Zengbao, President of the Hangzhou Internet Court, was invited to attend the forum and released ten typical cases of judicial protection of data rights and interests in Hangzhou Internet Court on the forum. This article briefly summarizes the significance of the ten "typical" cases.
Case 1: Judicial Regulation of Fictitious Data Driven by Data and Algorithms
-- Unfair Competition Dispute between Zhejiang Technology Co. Ltd. and Zhejiang Technology Co. Ltd. v. Defendants Xiangyang a Technology Company, Xiangyang B Technology Company, and Hubei Technology Company
In this case, the defendant promoted and advertised an aggregated intelligent traffic brushing software, which was able to automatically open the short video platform operated by the plaintiff and automatically implement a series of designated actions such as batch likes, comments, and random retweets, to realize the goals of brushing the designated video on the popular, intercepting and diverting the fans of peers, etc., and the plaintiff then sued to the court. After hearing the case, the court ruled that the defendant should stop the unfair competition, issue a statement to eliminate the impact, and should compensate the plaintiff for the economic loss and reasonable expenses totaling RMB 1 million. The case gave a negative evaluation to the behavior of fictitious platform data by brushing the amount of attraction, that such behavior will not only shake the cornerstone of the algorithmic recommendation function but also affect the operation and management of the platform based on algorithmic recommendation, the order of business promotion and the normal user experience, which belongs to the behavior of unfair competition.
Case 2: Legal attributes of data products and protection of rights and interests
-- Unfair competition dispute case between a software company and an Anhui technology company
In this case, the plaintiff is an e-commerce platform operation manager, it puts the user browsing, search, collection, plus purchase, transaction, and other behavioral traces of information generated by the raw data on the platform, through specific algorithms, in-depth analysis and filtering, refining and integration to form a data analysis products. After the defendant purchased the plaintiff’s data analysis products, allowing others to use the product in the form of remote login, and receive compensation, the plaintiff then sued the court. After hearing the case, the court ruled that the defendant should immediately stop the above infringement and compensate the plaintiff for the economic loss and reasonable expenses of RMB 2 million. The case clarified that network platform operators enjoy competitive property rights and interests in the big data products they develop and that directly using others’ data products as tools for their commercial interests without permission constitutes unfair competition.
Case 3: Boundaries of legitimacy in the commercialized use of public data
--Dispute over Commercial Defamation and Unfair Competition between Zhejiang Financial Services Company, Chongqing Small and Micro Loan Company and Suzhou Network Technology Company
In this case, the defendant published “enterprise liquidation information” captured from the National Enterprise Credit Publicity System on the enterprise information query platform operated by the defendant in 2019, but did not specify that the information was historical, causing users to mistakenly believe that it was new information for the plaintiff, which triggered a high level of concern, and the plaintiff sued the Court. The court ruled that the defendant should compensate the plaintiff RMB 600,000 for the economic loss and reasonable expenses, and eliminate the influence of the defendant. The case made it clear that the use of open public data by enterprises should follow the principles of lawfulness of source, timeliness of information, quality of information, and checking of sensitive information, to prevent improper use of the original data subject from causing damage; the users of the public data failed to fulfill the necessary duty of care, resulting in the damage to the legitimate interests of the original data subject, such as the legal person or the natural person, therefore, the users of the public data shall bear the corresponding legal responsibility.
Case 4: Tenure Determination and Classification Protection of Data Interests
-- Unfair competition dispute case between a Shenzhen computer company, a technology (Shenzhen) company, and a Zhejiang network company, a Hangzhou technology company
In this case, the defendant develops and operates “a group control software”, and realizes through technical means that on a social software operated by the Plaintiff, it can batch obtain and batch synchronize and interact with relevant friends’ chatting, liking, and commenting on the circle of friends, as well as transferring information, the plaintiff then sued to the court. After hearing the case, the court ruled that the defendant should immediately stop the unfair competition involved, compensate the plaintiff for the economic loss of RMB 2.6 million, and publish a statement to eliminate the impact for the two plaintiffs. The case clarified that the data control subject has competitive rights and interests in the data resources as a whole aggregated from a single raw data. The unauthorized use of other people’s data resources to carry out innovative competition should comply with the principles of “lawfulness, proportionality, user consent, and effectiveness”. Scaled-up and destructive use of other people’s data resources that do more harm than good in terms of competitive effectiveness should be recognized as unfair competition.
Case 5: Criteria for determining whether live streaming data constitutes a trade secret
In this case, during the defendant’s employment in the plaintiff’s company, both parties signed a confidentiality agreement. The defendant used the work privilege to analyze the plaintiff’s operation of the live platform background data, to master the law of the prize, through the association of multiple accounts to brush the prize, and to obtain a high amount of prize money. After leaving the company, he continued to log in the background to brush the prize, so the plaintiff sued the court. The court heard the case, applied punitive damages, and awarded the defendant RMB 3 million in compensation for the plaintiff’s economic loss. The case clarifies that data-based business information shall be protected if it meets the elements of a trade secret. Derivative data or big data composed of network raw data can be examined based on the element of secrecy to see whether it constitutes a trade secret. The winning data of the live broadcasting platform reflects the specific business strategy and business effect of the operator and reflects the deep information such as users’ rewarding habits and consumption habits, which can provide the operator with user profiles, attract traffic, and gain competitive advantages, and is of commercial value, and can be protected as a trade secret.
Case 6: The nature of social platform data and the determination of data crawling behavior
-- unfair competition dispute case between a computer system company, a technology (Shenzhen) company, and a technology company in Hangzhou
In this case, the plaintiff was the operator of a social platform, the defendant used technical means to bypass the data protection measures of the platform operated by the plaintiff, crawled the article information uploaded by the users on the platform, and exploited it commercially, which the plaintiff thought constituted unfair competition and sued to the court. After the trial, the court ruled that the defendant should immediately stop the data crawling behavior, eliminate the influence, and compensate the loss of RMB 600,000. The case clarifies that based on various factors such as the platform’s input to the data and the value of the data, the operator has a competitive interest in the platform’s overall data resources. Where the functions or services of a network product are restricted or undermined by technical means, interfering with the mode of operation and profitability, undermining the order and mechanism of competition, impeding the normal and orderly development of the market for that network product, and detracting from the well-being of consumers, Article 12(2)(d) of the Anti-Unfair Competition Law should be applied to regulate it.
Case 7: Judicial regulation of webcast data falsification
-- Infringement of the right to disseminate works on the information network and unfair competition case between a Beijing technology company and a Hangzhou technology company, Cheng Mou
In this case, the defendant developed a live broadcast field control assistant software, which allowed users to manipulate the number of concerns, likes, comments, gifts, and other live broadcast data within a short video platform operated by the plaintiff, and the plaintiff then sued the court. After hearing the case, the court ruled that the defendant should stop the above unfair competition and compensate the loss of RMB 1 million. The case made it clear that manipulating the real batch of short video platform accounts to falsely brush the traffic, increase the number of fans, brush the pop-up screen, etc., to help the network anchor false propaganda will mislead the consumers, make the platform of fictitious data and user evaluation to produce false cognition, affect the authenticity of the platform data and live heat, the kind of behavior disrupts the order of market competition and belongs to false propaganda.
Case 8: Protection of rights and interests about crowd-sourced information data
--People’s Procuratorate of a District of Hangzhou v. Defendants He Mou and Shi Mou Civil Public Interest Litigation on Dispute over Protection of Personal Information
In this case, Mr. He logged into the customer service account of the e-commerce platform and used the crawler software to crawl the customer order records of the store (including order number, name, phone number, shipping address, logistics number, etc.), and then made a profit through the cash withdrawal of virtual currency transactions. The Procuratorate then filed a public interest litigation. The court ruled that the defendant should pay more than RMB 260,000 in damages for infringing on social public interests and apologize. The case makes it clear that the data controller subject should follow the principles of justification, legality, necessity, and other specific rules stipulated in China’s personal information protection law when collecting and using such data and information. The data controller’s collection and use of information and data controlled by the data control subject without authorization and permission will likely infringe on the personal information personality rights and interests of the information subject as well as the data control subject’s data property rights and interests at the same time.
Case 9: Judicial Review of the Results of Big Data monitoring of platforms
--A contract dispute case between the network company and Li Mou network service contract dispute case
In this case, the defendant Li claimed that his cell phone was lost and his account on the online payment platform was stolen, so he gave feedback to the plaintiff and was awarded the claim. Later, the plaintiff’s background data monitoring and analysis system issued an alert, suggesting that the defendant’s claim was a false declaration, and then sued the court. After hearing the case, the court awarded the defendant RMB 10,001 in damages. In the case, the court adopted the platform’s conclusions based on big data analysis and made it clear that when the user could not give a reasonable explanation for his abnormal behavior, he should bear the resulting adverse consequences.
Case 10: Obtaining a Dealer’s Database by “Bumping” Constitutes Unfair Competition
- Unfair competition dispute case between a Hangzhou A Technology Company, Hangzhou B Technology Company v. a Hangzhou Network Company
In this case, the defendant after obtaining the plaintiff’s corporate membership account and password, defendant continuously logged into the paid membership accounts and passwords of Plaintiff’s corporate website to view, access, and utilize Plaintiff’s dealership database information in a “crash” manner, the plaintiff then sued to the court. After the trial, the court ruled that the defendant immediately stop the above behavior, eliminate the impact, and compensation for damages of RMB 350,000 yuan. The case clarified that the dealer database is a derivative data formed by desensitization, aggregation, and processing, which has commercial significance and value and can be protected. Others should follow the principles of legality, legitimacy, and necessity when obtaining relevant database information. Improperly obtaining the dealer database by “crashing the database” is a violation of the principles of honesty good faith and business ethics, and is an unfair competitive behavior.
This release of the ten typical cases, covers the legal attributes and rights protection of data products, ownership judgment and classification protection of data rights and interests, protection of data rights and interests related to crowded information, and other cutting-edge and hot issues in the field of data governance, which will further promote the healthy development of the data industry and empower the high-quality development of the digital economy.
Case 1: Judicial Regulation of Fictitious Data Driven by Data and Algorithms
-- Unfair Competition Dispute between Zhejiang Technology Co. Ltd. and Zhejiang Technology Co. Ltd. v. Defendants Xiangyang a Technology Company, Xiangyang B Technology Company, and Hubei Technology Company
In this case, the defendant promoted and advertised an aggregated intelligent traffic brushing software, which was able to automatically open the short video platform operated by the plaintiff and automatically implement a series of designated actions such as batch likes, comments, and random retweets, to realize the goals of brushing the designated video on the popular, intercepting and diverting the fans of peers, etc., and the plaintiff then sued to the court. After hearing the case, the court ruled that the defendant should stop the unfair competition, issue a statement to eliminate the impact, and should compensate the plaintiff for the economic loss and reasonable expenses totaling RMB 1 million. The case gave a negative evaluation to the behavior of fictitious platform data by brushing the amount of attraction, that such behavior will not only shake the cornerstone of the algorithmic recommendation function but also affect the operation and management of the platform based on algorithmic recommendation, the order of business promotion and the normal user experience, which belongs to the behavior of unfair competition.
Case 2: Legal attributes of data products and protection of rights and interests
-- Unfair competition dispute case between a software company and an Anhui technology company
In this case, the plaintiff is an e-commerce platform operation manager, it puts the user browsing, search, collection, plus purchase, transaction, and other behavioral traces of information generated by the raw data on the platform, through specific algorithms, in-depth analysis and filtering, refining and integration to form a data analysis products. After the defendant purchased the plaintiff’s data analysis products, allowing others to use the product in the form of remote login, and receive compensation, the plaintiff then sued the court. After hearing the case, the court ruled that the defendant should immediately stop the above infringement and compensate the plaintiff for the economic loss and reasonable expenses of RMB 2 million. The case clarified that network platform operators enjoy competitive property rights and interests in the big data products they develop and that directly using others’ data products as tools for their commercial interests without permission constitutes unfair competition.
Case 3: Boundaries of legitimacy in the commercialized use of public data
--Dispute over Commercial Defamation and Unfair Competition between Zhejiang Financial Services Company, Chongqing Small and Micro Loan Company and Suzhou Network Technology Company
In this case, the defendant published “enterprise liquidation information” captured from the National Enterprise Credit Publicity System on the enterprise information query platform operated by the defendant in 2019, but did not specify that the information was historical, causing users to mistakenly believe that it was new information for the plaintiff, which triggered a high level of concern, and the plaintiff sued the Court. The court ruled that the defendant should compensate the plaintiff RMB 600,000 for the economic loss and reasonable expenses, and eliminate the influence of the defendant. The case made it clear that the use of open public data by enterprises should follow the principles of lawfulness of source, timeliness of information, quality of information, and checking of sensitive information, to prevent improper use of the original data subject from causing damage; the users of the public data failed to fulfill the necessary duty of care, resulting in the damage to the legitimate interests of the original data subject, such as the legal person or the natural person, therefore, the users of the public data shall bear the corresponding legal responsibility.
Case 4: Tenure Determination and Classification Protection of Data Interests
-- Unfair competition dispute case between a Shenzhen computer company, a technology (Shenzhen) company, and a Zhejiang network company, a Hangzhou technology company
In this case, the defendant develops and operates “a group control software”, and realizes through technical means that on a social software operated by the Plaintiff, it can batch obtain and batch synchronize and interact with relevant friends’ chatting, liking, and commenting on the circle of friends, as well as transferring information, the plaintiff then sued to the court. After hearing the case, the court ruled that the defendant should immediately stop the unfair competition involved, compensate the plaintiff for the economic loss of RMB 2.6 million, and publish a statement to eliminate the impact for the two plaintiffs. The case clarified that the data control subject has competitive rights and interests in the data resources as a whole aggregated from a single raw data. The unauthorized use of other people’s data resources to carry out innovative competition should comply with the principles of “lawfulness, proportionality, user consent, and effectiveness”. Scaled-up and destructive use of other people’s data resources that do more harm than good in terms of competitive effectiveness should be recognized as unfair competition.
Case 5: Criteria for determining whether live streaming data constitutes a trade secret
In this case, during the defendant’s employment in the plaintiff’s company, both parties signed a confidentiality agreement. The defendant used the work privilege to analyze the plaintiff’s operation of the live platform background data, to master the law of the prize, through the association of multiple accounts to brush the prize, and to obtain a high amount of prize money. After leaving the company, he continued to log in the background to brush the prize, so the plaintiff sued the court. The court heard the case, applied punitive damages, and awarded the defendant RMB 3 million in compensation for the plaintiff’s economic loss. The case clarifies that data-based business information shall be protected if it meets the elements of a trade secret. Derivative data or big data composed of network raw data can be examined based on the element of secrecy to see whether it constitutes a trade secret. The winning data of the live broadcasting platform reflects the specific business strategy and business effect of the operator and reflects the deep information such as users’ rewarding habits and consumption habits, which can provide the operator with user profiles, attract traffic, and gain competitive advantages, and is of commercial value, and can be protected as a trade secret.
Case 6: The nature of social platform data and the determination of data crawling behavior
-- unfair competition dispute case between a computer system company, a technology (Shenzhen) company, and a technology company in Hangzhou
In this case, the plaintiff was the operator of a social platform, the defendant used technical means to bypass the data protection measures of the platform operated by the plaintiff, crawled the article information uploaded by the users on the platform, and exploited it commercially, which the plaintiff thought constituted unfair competition and sued to the court. After the trial, the court ruled that the defendant should immediately stop the data crawling behavior, eliminate the influence, and compensate the loss of RMB 600,000. The case clarifies that based on various factors such as the platform’s input to the data and the value of the data, the operator has a competitive interest in the platform’s overall data resources. Where the functions or services of a network product are restricted or undermined by technical means, interfering with the mode of operation and profitability, undermining the order and mechanism of competition, impeding the normal and orderly development of the market for that network product, and detracting from the well-being of consumers, Article 12(2)(d) of the Anti-Unfair Competition Law should be applied to regulate it.
Case 7: Judicial regulation of webcast data falsification
-- Infringement of the right to disseminate works on the information network and unfair competition case between a Beijing technology company and a Hangzhou technology company, Cheng Mou
In this case, the defendant developed a live broadcast field control assistant software, which allowed users to manipulate the number of concerns, likes, comments, gifts, and other live broadcast data within a short video platform operated by the plaintiff, and the plaintiff then sued the court. After hearing the case, the court ruled that the defendant should stop the above unfair competition and compensate the loss of RMB 1 million. The case made it clear that manipulating the real batch of short video platform accounts to falsely brush the traffic, increase the number of fans, brush the pop-up screen, etc., to help the network anchor false propaganda will mislead the consumers, make the platform of fictitious data and user evaluation to produce false cognition, affect the authenticity of the platform data and live heat, the kind of behavior disrupts the order of market competition and belongs to false propaganda.
Case 8: Protection of rights and interests about crowd-sourced information data
--People’s Procuratorate of a District of Hangzhou v. Defendants He Mou and Shi Mou Civil Public Interest Litigation on Dispute over Protection of Personal Information
In this case, Mr. He logged into the customer service account of the e-commerce platform and used the crawler software to crawl the customer order records of the store (including order number, name, phone number, shipping address, logistics number, etc.), and then made a profit through the cash withdrawal of virtual currency transactions. The Procuratorate then filed a public interest litigation. The court ruled that the defendant should pay more than RMB 260,000 in damages for infringing on social public interests and apologize. The case makes it clear that the data controller subject should follow the principles of justification, legality, necessity, and other specific rules stipulated in China’s personal information protection law when collecting and using such data and information. The data controller’s collection and use of information and data controlled by the data control subject without authorization and permission will likely infringe on the personal information personality rights and interests of the information subject as well as the data control subject’s data property rights and interests at the same time.
Case 9: Judicial Review of the Results of Big Data monitoring of platforms
--A contract dispute case between the network company and Li Mou network service contract dispute case
In this case, the defendant Li claimed that his cell phone was lost and his account on the online payment platform was stolen, so he gave feedback to the plaintiff and was awarded the claim. Later, the plaintiff’s background data monitoring and analysis system issued an alert, suggesting that the defendant’s claim was a false declaration, and then sued the court. After hearing the case, the court awarded the defendant RMB 10,001 in damages. In the case, the court adopted the platform’s conclusions based on big data analysis and made it clear that when the user could not give a reasonable explanation for his abnormal behavior, he should bear the resulting adverse consequences.
Case 10: Obtaining a Dealer’s Database by “Bumping” Constitutes Unfair Competition
- Unfair competition dispute case between a Hangzhou A Technology Company, Hangzhou B Technology Company v. a Hangzhou Network Company
In this case, the defendant after obtaining the plaintiff’s corporate membership account and password, defendant continuously logged into the paid membership accounts and passwords of Plaintiff’s corporate website to view, access, and utilize Plaintiff’s dealership database information in a “crash” manner, the plaintiff then sued to the court. After the trial, the court ruled that the defendant immediately stop the above behavior, eliminate the impact, and compensation for damages of RMB 350,000 yuan. The case clarified that the dealer database is a derivative data formed by desensitization, aggregation, and processing, which has commercial significance and value and can be protected. Others should follow the principles of legality, legitimacy, and necessity when obtaining relevant database information. Improperly obtaining the dealer database by “crashing the database” is a violation of the principles of honesty good faith and business ethics, and is an unfair competitive behavior.
This release of the ten typical cases, covers the legal attributes and rights protection of data products, ownership judgment and classification protection of data rights and interests, protection of data rights and interests related to crowded information, and other cutting-edge and hot issues in the field of data governance, which will further promote the healthy development of the data industry and empower the high-quality development of the digital economy.