A criminal verdict published on October 30th on China Judgments Online has revealed a portion of the illicit industry involving public relations firms in activities like illegal post deletion. Four companies were found guilty of illegal business operations in a first-instance ruling by the Shashi District People's Court in Jingzhou, Hubei Province, for their involvement in deleting online posts, leading to prison sentences for their responsible personnel.
Among those sentenced were Jiang Wei, the Assistant to the President and Head of the Big Data Center at the prominent PR firm Diansi, and Zhou Zixiao, the head of Jiufu's Beijing branch. They received prison terms of six years and nine months, and three years, respectively, both convicted of the crime of illegal business operations.
Client Companies Included Amway and Buchang Pharmaceuticals
The four companies involved are Beijing Diansi Public Relations Consultants Co., Ltd., Chunding Qiuhua (Beijing) Public Relations Consulting Co., Ltd., Beijing Huanyu Trends Technology Co., Ltd., and Shenzhen Jiufu Investment Consultants Co., Ltd. Beijing Branch. Responsible individuals from these companies and the specific personnel who carried out the deletions were also prosecuted.
The process these companies and individuals followed for illegal post deletion was as follows: the defendant companies signed agreements with client firms that required post deletion, then subcontracted the work to a husband-and-wife team, Wu Qiumin and He Wei. This couple carried out the illegal deletions by filing complaints to have content removed or by finding other deletion intermediaries to delete or block posts, charging fees ranging from 100 to 2,000 yuan per post.
From July 2015 until the case was uncovered, Diansi Company signed three Baidu SEO (Search Engine Optimization) contracts with Amway. As per these contracts, Diansi used methods including deletion, blocking, and sinking to cleanse negative information about Amway from the Baidu search engine.
Diansi Company charged Amway substantial fees for this paid deletion service. The illegal business turnover from post deletion amounted to 5,846,971.98 yuan, with illegal gains totaling 4,415,697.98 yuan.
According to defendant Jiang Wei's testimony, the technical intervention methods Diansi used to execute the three Amway contracts included deletion, blocking, sinking, brushing, and chaining.
From May to September 2016, defendant Zhou Zixiao, while serving as the head of Jiufu's Beijing branch, undertook a project to provide IPO services for Buchang Pharmaceuticals. At Buchang's request, Zhou instructed his team to handle the matter. The team collected a batch of online posts that could impact Buchang's listing and commissioned Chunding Company and Huanyu Company (a shell company controlled by Li Dongzhou) to delete and block the links to these posts.
Defendant Zhou Zixiao was aware of and approved these actions.
Jiufu's Beijing branch charged Buchang Pharmaceuticals for these paid services, averaging 7,000 yuan per post. The illegal business turnover from post deletion was 1,095,253 yuan, with illegal gains of 300,000 yuan.
According to the defendants' confessions, the deleted content mostly consisted of negative posts and a small number of videos about the client companies on platforms like Baidu Knows, Baidu Tieba, Tianya Community, Zhonghua Forum, and SINA Corp blogs. The fee structure was 100 yuan per post on Baidu Knows, 150 yuan on Tieba, 1,200 to 1,500 yuan on Tianya Community, 600 yuan on Zhonghua Forum, and 100 yuan on SINA blogs.
The court held that the defendant companies—Diansi, Chunding, Huanyu, and Jiufu Beijing Branch—along with defendants Wu Qiumin and He Wei, violated state regulations by profit-driven provision of paid deletion services via information networks, disrupting market order with particularly serious circumstances, thus constituting the crime of illegal business operations.
Jiang Wei was sentenced to six years and nine months in prison, while Zhou Zixiao received a three-year sentence.
Many Choose to Take Risks for Profit
Instances where search results show an article that cannot be opened, or clicking a link leads to irrelevant content, or news figures with continuous scandals are flooded with positive coverage—these are telltale signs. While illegal post deletion was extensively reported on by state media years ago, it remains rampant.
Faced with the lure of profit, many still choose to take the risk.
A nearly 10-minute news feature previously reported on six online PR firms, including Koubei Interactive, being investigated and punished, concluding with the pointed remark that the crackdown on cybercrime would become routine, placing online PR firms under intense scrutiny.
On July 26, 2018, Tianjin police apprehended 16 suspects involved in illegal post deletion and hype orchestration as part of an "online water army" scheme, with the case involving over 8 million yuan.
Police in Yuechi, Sichuan, arrested eight suspects in a series of illegal business operation cases involving profit-seeking through online post deletion, with the amount involved exceeding 2.4 million yuan.
According to the provisions of Article 7 of the judicial interpretation on handling criminal cases involving defamation and other crimes using information networks, violating state regulations by profit-driven provision of paid deletion services via information networks, or knowingly providing paid information dissemination services for false information, which disrupts market order, constitutes "serious circumstances" for illegal business operations if an individual's illegal business turnover exceeds 50,000 yuan or illegal gains exceed 20,000 yuan. Such acts are to be convicted and punished as the crime of illegal business operations under Item 4 of Article 225 of the Criminal Law.
Company Sued for Non-Payment After Failed Deletion
In a separate case, a deletion company sued a subsidiary and a sub-subsidiary of the Sanpower Group after they refused to pay because the post deletion did not achieve the expected results. The court, however, ruled that paid deletion services infringe upon the public's right to know and media supervision rights, and the deletion company was suspected of criminal activity. The court dismissed the lawsuit and transferred the case to public security authorities for investigation. Sanpower Brand Company stated that the court's ruling was correct and supported the transfer of the case for police investigation.
Online commenters noted that only major players would dare to take on such dubious operators.
It was reported that Hangzhou Yunba Media Technology Co., Ltd. signed a "Online Public Opinion Management Agreement" with Sanpower Brand Company, the main content of which was for Yunba to provide paid post deletion services to Sanpower, with Sanpower prepaying 300,000 yuan in deletion fees to Yunba.
As Yunba's deletion results were unsatisfactory, Sanpower Brand Company refused to continue paying the service fees. Consequently, Yunba sued the two Sanpower entities, requesting the court order Sanpower Brand Company to pay 2.95 million yuan plus interest losses.
The court determined that the remaining claimed amount pertained to fees for paid deletion information services and that the company's actions in this regard were suspected of illegal business operations. The first-instance ruling dismissed Yunba's lawsuit and transferred the case to public security authorities. The second-instance court dismissed the appeal and upheld the original ruling.
Yunba argued in the second instance that the services it provided were not direct deletions. It claimed to act merely as an intermediary, feeding posts back to Baidu through proper channels, with Baidu deciding whether to delete them. It stated the contract with Sanpower Brand Company was an agency relationship, and all tasks were performed upon Sanpower's provision and commission, with Yunba not deciding which entries to optimize. Feedback to Baidu was always submitted in Sanpower's name, with no work initiated proactively by Yunba.
Sanpower Brand Company argued that the contract content between the parties was illegal and void from the outset. Even if, as Yunba claimed, it only acted as a middleman, its actions still涉嫌 illegal business operations. The 300,000 yuan already paid constituted Yunba's illegal gains and should be refunded. Even if the 300,000 yuan was for corporate publicity reporting fees, Yunba failed to fulfill its contractual obligations, and the money should also be refunded. As Yunba's later deletion results were poor, Sanpower did not pay the subsequent service fees.
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