A smear campaign in Chinese social media can cause rapid, irreparable harm to brands in the market. Management that reacts to defend its brand more often than not causes backlash that evolves into a brand crisis. However, China’s legal system provides potent legal enforcement options with which to stop defamation. In this article, we will introduce a highly effective strategy for protecting your brand in China, which involves knowing how to characterize the attacks under local law, and formulate an appropriate response.
Contents
Is It Defamation or Trade Libel?
When a social media firestorm erupts in China, avoid responding immediately. Instead, your legal, operations, PR, and compliance teams should look at what actually happened. Then, they should see if the speech falls into one of these legal categories: insulting speech, a false statement of fact, misleading one-sided statements, defamation, unfair competition, or a crime. Doing so will enable making an effective management plan for your legal action to be successful.
Tortious Defamation
Civil parties have a right to reputation and freedom from insults or defamation. Here, insult means public humiliation of another person through abusive language or actions. (See China Civil Code § 1024) Insult includes verbal abuse and malicious image manipulation, whereas defamation is damaging another person’s standing in the community by publishing a false statement or distorting facts, which is done by using headlines, editing, or adding or removing content from quotes in a misleading way. The company and its management are entitled to protection against infringement on their right to reputation under the Civil Code.[1]
However, media organizations and the public in China are entitled to objectively report on and reasonably discuss the company and management, free of liability. The reason is that businesses are market participants and public figures with enhanced social responsibility. Therefore, speech against them is subject to a heightened fault requirement. However, “heightened fault requirement” does not mean immunity. Defamation liability may still be imposed on anyone who engages in intentional fabrication, distorts the facts, makes insulting statements, or omits the duty of reasonable investigation.
Courts apply a multi-factor test to reposting, republishing, or citing false third-party reports that constitute tortious speech:
- Source credibility
- Whether the actor reasonably verified the facts
- Their fact-checking capability
- Duty of reasonable investigation
For example, news organizations have better fact-checking capability and a duty of reasonable investigation, so state media reports and subject matter experts are more credible. If the actor continues to disseminate false information after the affected party has repeatedly rebutted misinformation, they will be deemed to have omitted the duty of reasonable investigation.
Unfair Competition
Trade libel examines harm to a party’s competitiveness, unfair competitive advantage, commercial benefit, and harm to market integrity. This is different from tortious defamation, which looks at loss of community standing. Trade libel perpetrated by a competitor may be deemed to constitute unfair competition. Defamatory statements published by an Internet content creator previously were pursued under a theory of tortious defamation, but now companies are winning lawsuits for trade libel.
Tortious content published by a content creator was examined in Beijing Case 73-cv-app-2182 (2020)[2]. The court interpreted the China Unfair Competition Act to not narrowly require a direct competitor relationship, reasoning that its legislative intent is to prevent harm to market integrity. Anti-competitive indirect competition that harms consumer or public interests is covered. In other words, the competitor includes more than commercial actors with similar products or services. The broader meaning encompasses anyone competing for consumer attention or purchasing power, or anyone that has a commercial conflict of interest.
Here, the defendant content creator and the plaintiff restaurant were not direct competitors, but the defendant did business with multiple other restaurant businesses that directly competed with plaintiff. This competition for customers was a commercial conflict of interest that amounted to indirect participation in the restaurant business. The court held the defendant competed with plaintiff and each element of trade libel was satisfied. The Act’s 2025 amendments incorporate this case law by including “other businesses” within the meaning of competitor, who is now protected under § 12.[3] This provides a clear avenue for businesses to protect their rights by using unfair competition claims.
Criminal Filing Threshold
Business managers may file a private prosecution for criminal libel or defamation. (See China Criminal Law Act) The requirements are the commission of online humiliation or defamatory conduct that receives at least 5,000 page views or 500 shares and causes the victim serious harm, such as psychiatric injury or self-harming behavior, or the existence of aggravating circumstances warranting criminal prosecution.[4]
The prosecutor’s office will file a public prosecution if the actor caused the above kind of serious harm, societal harm or insult/defamation to several people, did it repeatedly, or organized activity that caused severe harm to society and the national interest.[5][6]
Up to two years of imprisonment may be sentenced for fabricating and publishing false statements that harm commercial reputation or cause substantial loss, or where there are other aggravating circumstances. (See China Criminal Law Act § 221)[4]
In the Ulike case, the defendant caused millions of yuan in damages by purchasing fake test reports from an unlicensed lab to undermine their primary competitor before peak selling season.[7] They also intentionally fabricated safety hazard concerns about the product and promoted it on the Internet, which resulted in competing products being removed from shelves and influencer live streaming being cancelled. The hazard concerns allegedly misled consumers by purporting to raise awareness about life science and its importance to maintaining good health.
At trial, the parties contested several facts, including whether the articles made false statements or constituted sham public science education, whether there was subjective intent to damage competing products’ goodwill, the continued existence of product quality defects, and causation. Under the unity of intent and act, the court applied a totality of the circumstances test to distinguish defamation in bad faith from legitimate competition. The factors include their competitive relationship shown in communication records, whether facts were falsified, and the time and extent of publication.
Mitigating Risks on Platforms
An effective strategy for responding to an adverse public event in China is to preserve evidence about the content, publisher, and extent of publication. After this, in-house legal and business teams should work together to verify the facts and make a legal characterization.
Initiate litigation immediately if there is intentional fabrication or anything very serious and quickly publicize information about the lawsuit to correct public perceptions. A mere misunderstanding or one-sided information should instead be resolved by responding with the facts through public relations methods, but also have attorneys issue demand letters, and make their content public.
Carefully consider who issues statements in the context of different businesses. To protect management, don’t let them get personally involved. A non-response strategy is appropriate for plainly absurd information with little distribution, which de-escalates the issue by limiting the response to just preserving evidence.
Prevent spread of misinformation by making complaints to platforms to remove tortious content. However, successfully reducing the negative impact requires knowledge of each major platform’s complaints policy and how to use their portal. For a major negative publicity incident or if the platform has not responded to the complaint for a long time, have a lawyer issue a demand letter for the platform to meet its obligations to take necessary action.
Consider asking the platform for the infringing account holder’s registration data to use in litigation. Businesses can also demand the platform adopt a better management plan to deal with torts involving repeat, mass, or hash tagged content.
Send a letter to the tortfeasor to make a formal legal demand with a deadline, which serves as a deterrent and prepares for future litigation. Consult with legal and PR advisors to tailor it to the needs of the case and prepare a contingency plan in advance to prevent a secondary backlash. However, the tortfeasor is not always the best recipient, since they could exploit it or make it backfire. Anticipate how they may respond and the risk of the demand letter being made public, causing second-wave backlash.
Court and Regulator Action
File complaints about defamation appearing on Chinese websites or platforms, with the web host and with the Central Cyberspace Administration Business Online Infringement Reporting Portal, which will forward inquiries to government agencies including the local Internet regulator, or to the website, for resolution. The next step for damage mitigation is to file a lawsuit to eliminate the negative impact on public opinion and be paid damages. In court, obtain a preliminary injunction to delete the tortious content at the outset, and an order to seal, freeze, or seize assets in advance to secure payment of a judgment.
In reported cases, courts granted pretrial and litigation injunctions to cease and desist tortious conduct that could cause irreparable harm to a company, in litigation involving trade libel and online torts, i.e., defamation. (See Chongqing Case 01-cv-755 (2020) and Beijing Case 0491-cv-51722)[8][9]
The criminal referral process is a fallback remedy available to seek the most significant penalties against very serious tortious conduct. Here, the legal team will review the case and prepare a criminal referral package to result in a prosecution, explaining to the police agency that the alleged conduct rises to the level of criminality. If the conduct falls short, the actor can be held liable for a civil tort.
For example, in the Chicecream case involving a deceptive editing incident, the company publicized its trial court victory in a defamation action, saying “We have been smeared for years discouraging people to buy from us! This deceptive editing dispute has been going on for four years, in both criminal and civil and possibly back to criminal, and in Shanghai and Beijing.”[10] Although Chicecream received damages of 2.3 million CNY, it was too late to mitigate the enormous damage to the brand, and the company filed for bankruptcy soon after.
Conclusion
In this social media era, a firestorm can erupt suddenly and small mistakes lead to a crisis for the corporate brand and business interest. The law provides firm rules for identifying tortious conduct and taking enforcement action and provides a foundation for companies to protect their reputation.
FOOTNOTES
[1] Civil Code, (中华人民共和国民法典), (National People’s Congress, May 28, 2020), (in Mandarin)
[2] Beijing Case 73-cv-app-2182 (2020), ((2020)京73民终2182号), (Beijing Intellectual Property Court, 2020), text available at Sina, (in Mandarin)
[3] Unfair Competition Act, (中华人民共和国反不正当竞争法), (Supreme Procuratorate, Jun. 27, 2025), (in Mandarin)
[4] Criminal Law Act, (中华人民共和国刑法), (National People’s Congress, Dec. 26, 2020), (in Mandarin)
[5] Supreme Court and Chief Prosecutor – Defamation and Other Online Crime Adjudicative Guidelines, (最高人民法院、最高人民检察院关于办理利用信息网络实施诽谤等刑事案件适用法律若干问题的解释), (Supreme Court, Sep. 13, 2013), (in Mandarin)
[6] Supreme Court, Chief Prosecutor, and Ministry of Public Security – Punishing Cyberviolence Offenses and Crimes Guidance, (最高人民法院、最高人民检察院、公安部关于依法惩治网络暴力违法犯罪的指导意见), (Supreme Court, Sep. 20, 2023), (in Mandarin)
[7] Shanghai Case 02-cr-app-855 (2024), ((2024)沪02刑终855号), (Shanghai Second Appeals Court, Nov. 11, 2025), (in Mandarin)
[8] Chongqing Case 01-cv-755 (2020), ((2020)渝01民初755号), (Chongqing First Appeals Court, Aug. 12, 2021), (in Mandarin)
[9] Beijing Case 0491-cv-51722 (2021), ((2021)京0491民初51722号), (Beijing Internet Court, Sep. 18, 2023), (in Mandarin)
[10] Chicecream case, (钟薛高“爱要不要”判决书), (Beijing Internet Court, Jul. 25, 2025), text available at SOHU, (in Mandarin)