King & Wood Mallesons represents Ant Financial to successfully obtain the first order issued by Hangzhou Internet Court for pre-litigation conduct preservation caused by big data product in China

King & Wood Mallesons recently represented Zhejiang Ant Small and Micro Financial Services Group Co., Ltd. ("Ant Financial") and its subsidiary Chongqing Ant Micro and Small Loans Co., Ltd. ("Ant Micro Loans") to successfully obtain the first order issued by Hangzhou Internet Court for pre-litigation conduct preservation. It was the first case to discuss legal liability under competition law caused by data accuracy in the data industry.

Qichacha is a famous domestic platform for business information inquiry. In early May 2019, Qichacha repeatedly pushed a "warning message" reading that "Ant Micro Loans added Ying Jun as a new member to its liquidation group on 5 May 2019" to its subscribers who had followed Ant Micro Loans. This message resulted from a fault in Qichacha's collection of information.

Since hundreds of millions of users use the consumer finance product Huabei or Ant Credit Pay operated by Ant Micro Loans, the erroneous information attracted great attention from the regulatory authorities and the public who mistakenly believed that Ant Micro Loans was in the liquidation proceedings. It also made a large number of media have in-depth coverage of the incident as big news and hotspot.

In view of the urgency of the incident, King & Wood Mallesons was engaged by Ant Financial and Ant Micro Loans to apply to Hangzhou Internet Court for an interim measure for pre-litigation conduct preservation. After accepting the application, the court organized a hearing for both parties and ultimately decided that there was a high probability for Qichacha's conduct to constitute unfair competition and it was urgent and necessary to order an injunction relief. Thus the court ordered Qichacha to immediately cease the dissemination of the erroneous message mentioned above about Ant Micro Loans, push a clarification message in the same way within the same scope of release of such erroneous message, and publish a clarification statement on the homepage of its official website.

This case is innovative and typical since it involves an emerging type of services and a new type of infringement in China's big data industry. In recent years, big data products and services have skyrocketed in number and become increasingly complex and diverse in type. A set of mature rules has been established in judicial practice to deal with issues regarding data property rights and regulation under the competition law. However, it is still rare to see cases where big data companies collect and use erroneous data and cause damage to others' interests. This case indicates a conducive exploration of the prudential obligations to be fulfilled in the capture, screening, processing and integration of big data and the liability to be assumed for data product errors.

In addition, this case adopts and gives a full play to the interim measures for intellectual property. Considering the multiple channels, fast speed, great impacts and other characteristics of the dissemination of information and data in the Internet era, mere injunction is insufficient to avoid further loss that may have been caused by the transmitted and pushed erroneous or misleading information. Therefore, in addition to the injunction relief in the application for conduct preservation in this case, the applicant also requested a clarification statement in the same scope of release of the erroneous message. The court's approval of such a request reflects the effectiveness, promptness and convenience of conduct preservation.

This case was led by partner Mia Qu.