The thriving and rapidly evolving e-commerce sector has brought substantial convenience to social life, while also introducing many challenges. In recent years, Chinese legal scholars have been exploring how to govern e-commerce platforms in ways that facilitate their healthy, orderly development and ensure they fulfill their social responsibilities. Understanding the rights and obligations, as well as the powers and responsibilities, involved in platform-based commercial operations—and institutionalizing legal remedies and government regulation under the rule of law—requires analyzing the role of e-commerce platforms and the legal relationships reflected in their business models.

Blurred boundaries between market and enterprise

Some scholars argue that e-commerce platforms have evolved into organizers of productivity, controlling massive amounts of key production factors and operating under novel profit models. Legislators also tend to regard e-commerce platforms as possessing salient quasi-public attributes. The powers currently held by platform enterprises are essentially private-law powers that emerge “from the bottom up,” as platform operators and stakeholders form increasingly binding structures through market contracts or corporate organization. In this context, e-commerce platform enterprises have not introduced fundamentally different challenges compared to traditional large corporations; instead, they have increased the scale of existing issues.

However, what distinguishes e-commerce platforms is that, although platform operators themselves are enterprises, the transaction platforms they establish function as relatively independent markets wherein operators, merchants, consumers, and other participants engage in transactions primarily through contractual arrangements. The difficulty in governing e-commerce platforms lies in the way they shift issues traditionally handled within an enterprise to the “outside” via contractual relationships, rendering certain mandatory provisions in corporate and labor law inapplicable to these autonomy-centered arrangements.

Are e-commerce platforms markets or enterprises? In legal contexts, this question concerns the distinction between contract and organization. Traditionally, a market (contractual) perspective emphasizes the external behavior of companies, as well as the relationships between individuals and companies or among companies—typically governed by contract law, consumer protection law, or competition law. In contrast, an enterprise (organizational) perspective centers around the quality, efficiency, and improvement of internal governance structures and mechanisms within companies, which largely fall within the purview of corporate law. E-commerce platforms seem to blur this boundary, functioning as a hybrid or intersection of the two.

Differentiated and evolving governance strategies

From a legal standpoint, the market represents a system of transaction-based relationships involving rights and obligations. In the context of e-commerce platforms, the blurred and dynamic boundaries of enterprises give rise to diverse business models, necessitating differentiated regulation strategies targeting different legal relationships. Given the central role of information in e-commerce platform business models, information rights have become an important lens through which platform governance is studied.

Take ride-hailing platforms as an example. The “Hitch” service exhibits the characteristics of a traditional sharing economy. In this service, platforms do not act as suppliers of shared resources but primarily serve as information aggregators, with limited exercise of information rights—they do not exert direct control over Hitch drivers’ departure times or destinations. Consequently, the safety measures provided by platforms are relatively weak. While this model offers convenience to both drivers and passengers, it makes risk control more difficult. In 2018, the Ministry of Transport and the Ministry of Public Security of the PRC jointly issued a notice requiring ride-hailing platforms to reform their “Hitch” services. In contrast, in regular ride-hailing services, platforms control and utilize information to a greater extent. Orders are assigned to drivers based on factors such as time, location, and demand, leaving drivers with limited discretion. Accordingly, platforms bear greater responsibilities in terms of vetting and implementing safety measures.

In general, even for companies with pronounced public attributes, regulatory authorities should refrain from directly intervening in internal corporate governance. Instead, they can steer improvements through regulatory guidance. In recent years, many e-commerce platforms enterprises have begun to publish ESG (environmental, social, and governance) reports—not only to comply with regulatory requirements but more importantly to build a positive public image, given the close connection between long-term corporate interests and external factors. Overall, companies are becoming more proactive in assuming social responsibilities. According to their ESG reports, e-commerce platforms have established various dedicated committees to manage internal and external relations, including ESG committees and more specialized bodies such as professional ethics committees and self-regulation committees.

The model whereby e-commerce platforms tailor their governance structures to their specific needs may represent the direction in which corporate governance will evolve in the coming years. Recent reforms in the Company Law of the PRC also address this institutional need. The implementation of this law is no longer a matter of passive compliance with rules; rather, it increasingly embodies constructive dynamics between rules and companies.

Zhou You is an associate professor from the Law School at Central University of Finance and Economics.