Live streamers make their money from from fan donations, paid advertising, brand sponsorships, paid subscriptions, and commissions from marketing and affiliated sales. Direct donations or tips can be an important source of income, especially for less well-known streamers that are less likely to score big brand sponsorship or affiliation deals.
The China Youth Daily recently reported a case where a live streaming platform company refunded nearly 1.6 million Chinese yuan (approximately USD$250,000) to a viewer. In this case, the viewer is a middle schooler who used his parents‘ money to donate to streamers on the live stream platform. When the parents found out about their child’s spending, they requested the streaming platform return the money, but the streaming platform refused. The parents then filed a lawsuit against the platform and eventually settled the case with the streaming platform refunding the money. The main reason for the refund is that the viewer is a minor with limited capacity for civil conduct, and the donation exceeded such limited capacity. Without ratification by the parents or legal guardians, the minor’s large donation is invalid and revocable.
Large donations made to streamers by minors without their parents’ knowledge or consent are not all that rare in China. In 2019, an 11-year-old donated nearly 2 million yuan to several streamers. Another 7-year-old guessed his grandmother’s mobile payment password for mobile and donated more than 8,000 yuan to video game streamers. Similar stories have happened elsewhere as well.
This recent case complies with Chinese court guidance. In May 2020, China’s People’s Supreme Court’s issued certain Guidance on issues related to handling civil cases involving COVID-19, specifically addressing this sor of situation. If a person with limited capacity for civil conduct makes in-game purchases or donations on live streaming platforms without their guardians’ consent and the amount of the purchase or donation is not suitable for the person’s age or intelligence, and the guardian requests a refund, the court shall support such a request. Under Chinese laws, minors are generally considered having either limited capacity (age 8-18) or no capacity (under the age of 8) for civil conduct. Most countries have similar laws.
In November 2020, China’s National Radio and Television Administration released a Notice on Strengthening Management of Online Shows and E-commerce Live Broadcast, providing that streaming platforms must implement and enforce real name registration systems and prohibit donations by minor users.
Though China has laws and guidance on how to regulate online donations by minors, the implementation of these laws faces practical challenges. For example, the amount suitable for a minor’s age or intelligence can vary on a case-by-case basis and minors may circumvent these restrictions by using their parents’ accounts and then the streamers may argue the donations actually came from the parents. When requesting a refund, parents often face resistance from streaming platforms or e-commerce sites.