Shanghai Court Rules: Exploiting Platform Vulnerability to Tamper with Store Contacts for Traffic Redirection Constitutes Unfair Competition
Published 22 December 2025
Fei Dang
On December 15, 2025, the People's Court of Huangpu District in Shanghai (“the Court”) published an unfair competition dispute involving the exploitation of a platform's “error reporting” mechanism to replace contact numbers publicly displayed by others on the platform with their own numbers, redirecting consumers to their own stores. The two defendants in the dispute were ordered to compensate the plaintiffs for economic losses of 400,000 yuan and 200,000 yuan respectively, and jointly cover reasonable legal expenses of 67,040 yuan. The judgment has taken effect.
Case Introduction
The two plaintiffs are the owners of trademark rights such as “三联”, “申 亨得利”, and so on, and the branch office thereof, which are engaged in the business of clock and watch repairing. They also co-operate with a shop on a online group-purchasing platform.The plaintiffs claimed that they discovered two different shops on the said group-purchasing platform that had used identical or similar marks to the plaintiffs’ trademarks in their promotions without authorization. Among them, one Shop, L, used the marks “三联”, “三联 sanlian”, and “亨得利” in its shop name and promotional graphics, and advertised with phrases such as “Sanlian Luxury Watch Repair Center: A Century of Artisanal Heritage,” “Sanlian Watch Service Center - Luxury Watch Repair, Artisanal Brand, Century-Old Heritage” in its promotional materials. The other Shop, Z, used the “亨得利”, “亨得利”, and “亨得利 HENGDELI” logos in its store name, promotional graphics and videos, and group-purchasing coupon product names. Furthermore, the plaintiffs discovered that one of the shops exploited the platform's error reporting mechanism to alter the contact number listed for the plaintiffs' shop to that of Shop L. When potential customers called, they claimed the plaintiffs' shop no longer provided repair services and asserted that their shop was the authentic repair center for the brands in question. They then directed consumers to their own shop address to divert business.
Accordingly, the plaintiffs claimed that the two shops above had infringed upon their exclusive trademark rights and engaged in unfair competition, and filed a lawsuit against the operating entities and sole shareholders of the two shops, Li and Zheng, as well as the group-purchasing platform. The plaintiffs requested that all parties immediately cease the infringement and publish statements to eliminate the adverse impact. Furthermore, they sought joint compensation from defendants Li and Zheng for economic losses totaling 3 million yuan and reasonable expenses incurred in protecting their rights amounting to 67,040 yuan.
The defendant Li had not only denied the false advertising and redirecting consumers by changing the telephone number by his shop, but also claimed that it had not infringed any trademark rights on the grounds as follows: 1) The “三联” trademark involved herein is a product trademark, whereas the subject matter here pertains to services; 2) The ownership of the ‘亨得利’ trademark had long been in dispute. Although the plaintiffs hold trademark rights for “申 亨得利”, this does not equate to rights over “亨得利”. The defendant Zheng denied committing trademark infringement or unfair competition, asserting he did not participate in the defendant Li's shop renumbering scheme to intercept customers and had no collusion with him, thus not constituting joint infringement. The group-purchasing platform stated that it had fulfilled its due diligence obligations, did not constitute joint or contributory infringement, and therefore should not bear any legal liability.
Upon hearing the case, the Court considered that the plaintiffs, having operated under the “亨得利” trade name in the watch and eyewear industry for an extended period, has become one of the enterprises with legitimate rights and interests in the “亨得利” name. The involved marks “亨得利” and “亨得利HENGDELI” are similarity to the plaintiffs' registered trademark “申 亨得利”. When used on identical services, they are likely to cause confusion. Therefore, the acts of the two defendants using the involved marks on their respective stores constituted trademark infringement.
The Court also considered that the plaintiffs’ “三联” trade name has gained significant recognition through years of continuous operation and promotion, establishing itself as a business name with certain influence. The defendant Li, as a competitor in the same industry, used “三联” and “三联sanlian” on his shop and was likely to mislead the public into believing his shop had an association with the plaintiffs, which demonstrated a subjective intent to free-ride on the plaintiffs' goodwill and constituted unfair competition. Furthermore, the Court determined that the promotional claims such as “Century-Old Heritage” used by the defendant Li's L shop could lead relevant consumers to believe an association existed with the plaintiffs, thereby constituting false advertising.
As to the defendant Li’s act of renumbering scheme to intercept customers, the Court considered that since the defendant Li could not provide a reasonable explanation for why the plaintiffs’ shop phone number was redirected to his store's number, and why his customer service staff used that number to send customers his store's address, thereby generating revenue for his store, it can be concluded that “it is highly probable that he exploited the platform's error reporting rules to change the plaintiffs’ shop phone number to his own, and used customer service staff to divert traffic.” The Court further held that the said actions by the defendant Li's shop not only deprived the plaintiffs of anticipated business opportunities and harmed their economic interests and competitive advantage, but also disrupted the fair competitive market order, violated the principles of good faith and business ethics. The false statements made by its customer service personnel when answering calls also constituted deceptive and misleading false advertising practices that misled consumers, thereby constituting unfair competition.
Regarding the liability, since both defendants' shops had been deactivated from the platform and their business entities deregistered, the Court determined that the relevant public would no longer be confused about the source of services based on platform information. Therefore, it no longer supported the plaintiffs' claims for ceasing infringement and publishing statements to eliminate the adverse impact. The Court further found that the existing evidence was insufficient to establish that the platform knowingly or should have known of the infringement yet failed to address it, thus ruling that the group-purchasing platform had no contributory liability.In conclusion, upon comprehensively considering all relevant factors in this case, the Court ordered the defendant Li, the sole shareholder of the business entity operating the shop L, to compensate the two plaintiffs for economic losses amounting to 400,000 yuan. The defendant Zheng, the sole shareholder of the business entity operating the shop Z, was ordered to compensate the two plaintiffs for economic losses amounting to 200,000 yuan. Both defendants were jointly ordered to compensate the two plaintiffs for reasonable expenses incurred in protecting their rights totaling 67,040 yuan. This judgment has now taken effect.
Case Comment
This case primarily concerns trademark infringement and unfair competition involving the diversion of traffic by falsifying another party's shop information.
Regarding the trademark infringement issue, it mainly involves the following circumstance under Article 57 of the Trademark Law: “(2) Using a trademark similar to a registered trademark on the same type of goods, or using a trademark identical or similar to a registered trademark on similar goods, without the permission of the trademark registrant, where such use is likely to cause confusion; ....” More specifically, the marks “三联 sanlian” and/or “亨得利” used by the two defendants in their respective shops bear a high degree of similarity to the plaintiffs’ registered trademarks “三联” and “申 亨得利”. When used concurrently in connection with watch repair services, they are highly likely to cause confusion. Not to mention that one of the defendants engaged in the practice of diverting customers from the plaintiffs' shop, which would undoubtedly further exacerbated the confusion between the parties' marks.
In terms of unfair competition, taking the case of defendant Li's shop engaging in customer poaching and traffic diversion as an example, the primary illegal acts involved are as follows:
1) Using identical or confusingly similar marks and names to the plaintiffs' trademarks and business name in its shop name and promotional materials. Such act had not only demonstrated an intent to free-ride on the plaintiffs' goodwill but also constituted the misleading conduct defined in Article 7 of the Anti-Unfair Competition Law, which prohibits acts likely to cause confusion as to the origin of goods or the existence of a specific relationship with another party. Specifically: “(2) Unauthorized use of another party's business name (including abbreviations, trade names, etc.), the name of a social organization (including abbreviations, etc.), or a name (including pen names, stage names, translations, etc.)”
2) Exploiting the platform's error reporting mechanism to alter the plaintiffs' shop phone number to their own, and then deceiving potential customers who called by falsely claiming the plaintiffs no longer provided services while redirecting them to their own store. Such action had not only objectively deprived the plaintiffs’ business opportunities and exhibited the malicious nature of “free-riding” and “traffic hijacking,” but also constituted false advertising through their customer service representatives' misleading statements to consumers during those phone calls. Therefore, the said actions violated Article 2 of the Anti-Unfair Competition Law, which states that “operators shall follow the principles of voluntariness, equality, fairness, and integrity in production and business activities, and comply with laws and commercial ethics,” as well as Article 9, which prohibits operators from “making false or misleading commercial representations about the performance, functions, quality, sales status, user reviews, or honors received by their goods, thereby deceiving or misleading consumers.”
Accordingly, the Court separately assessed the trademark infringement and unfair competition acts above, and upon considering factors such as the prominence of the plaintiff's trademarks and business name involved in the case, as well as the degree of subjective fault of each defendant, it determined the respective liability for damages of the two defendants. Among them, the defendant Li bore heavier liability for damages due to his unfair competition conduct of altering the plaintiffs' phone number and intercepting customers to divert traffic to his own store.
In short, the internet is not a lawless zone. This ruling clarifies the illegality of exploiting platform rule loopholes for self-promotion, serving as a warning to merchants across major platforms.