On the evening of April 28, Cainiao Group released a message through its official account "Cainiao Posthouse", putting on the table the "old case" about unfair competition between Cainiao and Pinduoduo two years ago. This matter concerns the right and wrong of the competition between two Internet companies in the field of terminal logistics, and can also be seen as a typical case of how to define "unfair competition".
In early April, the Higher People's Court of Zhejiang Province made a second instance judgment, rejecting Pinduoduo's appeal and upholding the first instance judgment. It found that Pinduoduo's promotion of the "Duoduo Maicai End System" in the end stores of Cainiao Station constituted unfair competition behavior. Pinduoduo was ordered to compensate Cainiao with 5 million yuan and an apology statement was published on the "Duoduo Maicai" platform of Pinduo's website.
The case dispute will return to 2022. At that time, "Duoduo Maicai", a subsidiary of Pinduoduo, was in a period of strategic development. In addition to community group buying business, it also focused on express delivery and collection services.
According to a previous report by Caijing Tianxia Weekly, Duoduo Maicai officially stated that it has signed cooperation agreements with multiple express delivery companies in the market, connected the delivery system, and in addition, to attract network entry, Pinduoduo will also provide subsidies for the first batch of stations to settle in. However, in the actual operation process, the development of sites under "Duoduo Maicai" did not completely adopt a "restart" approach, but partially targeted sites that already have express delivery collection services, including Cainiao Station under Cainiao Group.
At that time, Cainiao Station's "counterattack" method was to inform its franchisees that if they violated the relevant provisions of the Cainiao Station Cooperation Agreement and used a third-party receiving system for storage, it was a breach of contract. Cainiao had the right to terminate the cooperation with the station and cancel its qualification registration. Meanwhile, in April 2022, Cainiao filed a lawsuit against Pinduoduo on the grounds of unfair competition.
Through the second instance judgment, it can be seen that the core appeal of Pinduoduo lies in two aspects: firstly, the use of "Cainiao" and "Cainiao Station" in the name of the "self pickup point" in the "Duoduo Maicai" community group buying business belongs to an objective description of the geographical location of specific end stations; secondly, it states that this is a legitimate competition between Pinduoduo and Cainiao's different business models, "which does not harm the interests of other relevant market entities and public interests, and there is no unfairness.".
In fact, after the news of the second trial of the case came out, there were still different perceptions and opinions on this incident in the market. Some public opinion believed that Cainiao Station had engaged in a market monopoly to force franchisees to choose between two options, while others expressed regret from the perspective of Cainiao Station franchisees, believing that their desire to earn more money could be understood.
A person close to Cainiao Group told Blue Whale News that this does not involve choosing between two options. "It's like a brand supermarket setting up its own settlement system in another brand supermarket and selling its own goods, how can the latter tolerate it.". More public opinion believes that this is a way for Duoduo to pick up the fruits of Cainiao Station.
However, from the content expressed by Pinduoduo in the judgment, it can be confirmed that "the three appellants have confirmed that the scope of infringement in this case is only in Zhejiang Province, and have not provided evidence of their economic losses", which can confirm that the "invasion" of Duoduo Maicai to the Cainiao Station site is limited to Zhejiang Province.
From the judgment, the Higher People's Court of Zhejiang Province has discussed the definition of "unfair competition" from "whether it harms the legitimate rights and interests of other operators, disrupts market competition order", "whether it harms public interests such as consumer rights or incentive innovation mechanisms", and "the subjective state of operators". From the perspective of public interest, the court mainly considers consumer rights.
It is pointed out that "consumers are the direct beneficiaries of market goods and services, as well as the bearers of market competition results. If competitive behavior is conducive to improving consumer welfare, it is more likely to be seen as fair competition." The judgment points out that the silent intrusion of the Duoduo Maicai system into the Cainiao station will sever the relationship between consumers and Cainiao services, "which will inevitably reduce the service experience of consumers, damage the service evaluation and improvement mechanism, and significantly reduce the service quality of end outlets. In the long run, it will ultimately damage the welfare of many consumers.
Cainiao stated that this ruling is of great significance for maintaining a healthy market environment in the end of the line logistics industry. The ruling also finds "no evidence to suggest that Cainiao's system is in a monopolistic position in the end of line logistics market.". Cainiao also stated that it reserves the right to seek legal action against defamatory remarks such as confusing the public and spreading the Cainiao Station's "two to one" policy.