Asia Tech Wire (Apr 25) -- Chinese e-commerce giant Pinduoduo, which operates Temu, has lost an unfair competition case with Cainiao, the logistics arm of rival Alibaba.

The Zhejiang Provincial Higher People's Court recently issued a final judgment in the case of Cainiao v. Pinduoduo for unfair competition, rejecting the latter's appeal.

This came after an intermediate people's court ruled that Pinduoduo should immediately stop the unfair competition in question, and compensate Cainiao 5 million yuan ($0.69 million) for economic losses and and reasonable costs of defending its rights.

The dispute began in early 2022, when Pinduoduo ventured into the delivery end to promote "Duoduo Post", triggering an unfair competition dispute with Cainiao.

The latest decision is the final ruling on unfair competition between the two Chinese internet giants in the field of express delivery and logistics.

The court filing states that Pinduoduo's promotion of the "Duoduo Post" stores relied on Cainiao's already well-developed store resources to reduce its operating costs, in order to obtain market trading opportunities and gain a competitive advantage in the marketplace.

The court held that this quiet and unannounced approach also utilized the advertising and promotion costs invested by Cainiao for the stores without compensation, which was an improper use of other's market fruits and violated the principle of honesty and trust and business ethics.

Therefore, the court dismissed Pinduoduo's appeal and affirmed the first-instance judgment.

(US$1 = 7.2469 yuan)