Four BIC cases included in SPC’s typical cases on judicial protection of corporate reputation right
The rule of law provides the best business environment. Objective credit evaluations serve as vital guarantee for the corporate business development. Protecting corporate reputation right is an integral part of building a law-based business environment. To fully tap the publicity and exemplary role of typical cases, the Supreme People's Court has released six typical cases on judicial protection of corporate reputation right, four of which are handled by the Beijing Internet Court (BIC).
Case 1
Self-media operators who publish slanderous articles against enterprises should bear tort liability for damaging the reputation of the enterprise.
Handling judge: Vice-President of the BIC Zhao Changxin
Case summary
The defendant surnamed Yang, operated a self-media account in the real estate sector. On the day before company A signed a distribution agency contract with a developer, Yang posted a commentary article on the account, commenting the company's distribution acts as "disrupting the market" and "robbing its peers" without factual basis. The article also used derogatory terms such as "fraud", "troublemaker", "robber", and "rascal", attracting wide public attention and dissemination online.
Company A held that Yang had maliciously defamed the company at a critical operational juncture, causing serious negative impact on the company's reputation, the company A sued Yang at the BIC, requesting a public apology and compensation for losses.
Details of the judgment
Upon trial, the BIC ruled that the content of Yang's article contained serious falsehoods and a significant amount of unpalatable language, which exceeded the scope of reasonable commentary. The widespread dissemination of the article was sufficient to create a negative public perception among the public regarding the company's business practices, thereby impairing the company's brand and credit.
Yang as a self-media account operator in the real estate sector, should have been aware that the article would be noticed by readers in the sector. Their failure to be responsible to the truthfulness of the article demonstrated subjective negligence and thus should be legally liable. Also, the article was published on eve of the signing of a distribution contract with its developer agent, with the content directly targeting the company’s business practices. The intention to sabotage the contract signing was obvious. Yang’s action not only infringed upon the company’s right to reputation, but also disrupted the normal market order. Eventually, the BIC ruled that Yang should issue a public apology and compensate for the company's losses.
Significance
Corporate reputation is a comprehensive assessment by the society of a enterprise's various factors such as business credibility and operational capabilities. A good reputation is a valuable asset that a company accumulates over time through lawful and honest operations, serving as the social credit foundation for the survival, development, and growth of an enterprise.
Self-media communication is characterized by low costs, fast dissemination, and wide reach. If self-media operators publish severely false negative comments about an enterprise, it can easily damage the hard-earned image of the enterprise and tarnish its reputation.
Failure to hold individuals accountable for such actions in accordance with the law not only harms the interests of the enterprise and the confidence of entrepreneurs, but also risks fostering an "industry chain" of slanderous articles, disrupting the fair and orderly market environment. In this case, the BIC determined that the self-media operator damaged the company's reputation and committed infringement to the company’s reputation right. This judgment is beneficial for sternly punishing malicious acts that harm a company's reputation, guiding the standardized operation of self-media, and building a healthy and clean online environment.
Case 2
Derogatory remarks against the founder of a company constitute a violation of the company's reputation and should be held accountable
Handling judge: Deputy head of the BIC's Third Comprehensive Division Jing Wenjie
Case summary
Company A is a well-known domestic enterprise founded by Wang who serves as its legal representative. Li, a self-media practitioner,operates multiple self-media accounts. Through these accounts, Li posted several articles commenting on company A and its legal representative Wang, containing derogatory content against both the company and Wang. Company A claimed that Li's actions have infringed upon its reputation rights and filed a lawsuit against Li at the BIC, requesting that Li should delete the articles in question, issue a public apology, and compensate for the losses incurred.
Details of the judgement
Upon investigation, the BIC determined that Li's published content was directed towards Company A and its affiliated enterprises, based on common understanding and the specific context before and after the occurrence of the remarks in question. Remarks about Wang were made within the context of assessing the commercial operations of the company and its affiliates, which served as implications and abstractions of their business practices. Given the close association between Wang's personal reputation and that of the company, the public would typically directly associate comments concerning Wang's commercial activities with the company. Therefore, the company could assert rights regarding the remarks in question, including those directed at Wang. The BIC held that the remarks in question were clearly derogatory, lacked factual basis, and had constituted an infringement on the Company A's reputation rights. The court ruled Li to delete the contentious articles, issue a public apology, and compensate for the losses.
Significance
The founder of a company plays a crucial role in its business development. Especially for well-known companies, the reputation of the founder is highly associated with the reputation of the company. In normal business operations, derogatory remarks against the founder can easily affect the company's reputation, potentially constituting an infringement on the company's reputation rights. In this case, the individual made derogatory remarks not only against the company but also against the founder's business practices. The court's support for the company in its claim against the infringing remarks is conducive for the more comprehensive and effective protection of its reputation rights.
Case 3
Corporate credit reporting agencies held liable for reputational infringement due to erroneous information association
Handling judge: deputy head of the BIC's second Comprehensive Division Zhang Qian
Case summary
Company A and Company B were corporate credit reporting agencies that jointly operated a corporate credit platform. Company C discovered on this credit platform that criminal records, pertaining to an unrelated individual surnamed "Lu", who had been convicted of contract fraud, bribery, embezzlement, and misappropriation of funds. This criminal information was erroneously associated with the chairman of Company C, who shared the same name with the criminal. Furthermore, multiple pieces of revoked but not deregistered enterprise information unrelated to Company C and its chairman Lu were also linked to Company C. Company C believed that the actions of Company A and Company B had infringed upon its corporate reputation, causing serious negative impacts on its normal business and financing activities. Therefore, Company C filed a lawsuit to the BIC requesting the court to order Company A and Company B to delete and correct the erroneous information, issue a public apology, and compensate for the losses incurred.
Details of the judgment
Upon investigation, the BIC determined that Company A and Ccompany B displayed information about Company C and its chairman on their corporate credit platform, which included criminal record information and multiple pieces of revoked but not deregistered enterprise information about an individual of the same name as the chairman. Such disclosure would mislead to general public and cast doubt on the business practices of Company C, objectively diminishing its social reputation.
Company A and Company B failed to fulfill their duty of care in ensuring that the information was correctly associated, which had constituted an infringement upon the reputation of Company C. Taking into account the degree of fault, the manner of infringement, and the scope of the impact of the involved information, the BIC decided that Company A and Company B should bear corresponding liabilities for the infringement, and ordered them to issue a public apology to Company C and compensate for the losses.
Significance
In practice, corporate credit reporting platforms play a positive role in reinforcing the credit of market entities, ensuring transaction security, and enhancing social supervision. However, the use of algorithms and big data processing on credit platforms, must be accompanied by a strong commitment to data authenticity and accuracy of information. Errors and false associations would mislead public perception and damage the reputation of businesses. In this case, the BIC determined that the corporate credit reporting agencies should bear corresponding liabilities for the erroneous utilization of data. It serves as a reminder that such institutions must handle relevant information prudently, promptly update information, and follow up on services to ensure the legality of data sources and the accuracy of content. While expanding their own business models, they must not harm the legitimate rights and interests of other market entities.
Case 4
Publishing evaluation articles without actual testing should be liable for infringement
Handling judge: deputy head of the BIC's Second Comprehensive Division Zhang Qian
Case summary
The plaintiff, an automotive company, filed a lawsuit against Ma, a professional vehicle evaluator employed by an automotive testing agency. Ma posted false information on his social media account regarding the internal management, business operations, and product design and quality of the company. Moreover, without actual product testing or any other basis, Ma described the cars produced by the company with words such as "veering off course,""brake failure," and "worrisome quality". The company argued that such statements severely damaged its reputation and negatively impacted its business operations, requesting an order for Ma to cease the infringement, issue a public apology, and compensate for the losses occurred from the infringement.
Details of the judgment
Upon investigation, the BIC held that Ma as a professional evaluator in the automotive industry, bore a higher duty of care than ordinary car consumers and should be objective and impartial when making automotive evaluation statements. Ma's comments about the company and its products lacked factual basis as they were neither supported by actual testing nor other credible evidence. These comments diminished the social evaluation of the product and infringed upon the company's reputation. Ultimately, the BIC ordered Ma to make a public apology and compensate for the losses.
Significance
Product evaluation is a market evaluation model in the internet economy. Evaluators make assessments and recommendations on specific business operators, goods, and services based on their professional knowledge and actual product testing, providing consumers with decision-making references. In doing so, evaluators should objectively publish evaluation content, truthfully reflecting the quality and functionality of products, and avoid making inappropriate remarks that could infringe upon the legitimate rights of the business operators. In practice, some individual evaluation bloggers and social media accounts publish false evaluation information without conducting actual testing and other factual basis. This behavior would not only mislead consumers but also infringe upon the reputation rights of relevant parties and disrupt normal market order. The ruling in this case helps clarify the boundaries of evaluation comments, and guide and regulate related behavior in the product evaluation field.
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