Apex court's robust moves to protect corporate rights to reputation

Want to boost the "popularity" of your digital platform by spreading sensational but false information on the Internet about a private enterprise? Think twice.

The latest message from the Supreme People's Court: You're legally liable if you are found to have libelled an enterprise as a way to drive more traffic to your digital platform.

On February 17, the nation's apex court published six recent cases of cyber defamation in a high-profile effort to ensure that private enterprises, which account for more than 90 percent of the total number of companies across China, are sufficiently protected or remedied where their rights to reputation are at risk due to slander and certain other torts.

None of the six cases were clearly dated, but collectively these recent rulings serve to signal the country's determination to encourage and support the sound development of the private sector. As the Supreme People's Court pointed out in a prefatory comment on February 17, rule of law per se is the best business environment.

In one published case, a leading media firm was found to have fabricated a story about a certain beverage business. It so happened that the media firm once asked the beverage company whether it was considering a layoff plan, and was told that there were no such plans at the moment. However, the media firm went ahead and wrote a so-called "exclusive" report, claiming the beverage business had "reportedly sacked 20 percent of its employees."

As a local court discovered, the "exclusive" report, which was widely circulated on the Internet, devoted about half of its content to "describing" the beverage firm's alleged layoffs and difficulties. The court ordered the media outlet to apologize to and compensate the beverage company for having spread false information that damaged the latter's reputation.

Corporate reputation: a hard-won treasure

Commenting on the case, the Supreme People's Court said: "While a rapid growth of Internet media has enriched people's life and played a positive role in information dissemination, resource sharing and public supervision, some media outlets have caused damage to corporate reputation by spreading false information to attract web traffic. The people's courts categorically say no to these (torts) and duly mete out punishment (to perpetrators)."

In another case, the owner of several we-media (or self-media) outlets was found to have spread false and defamatory content about a certain tech company and its founder. A local court decided that the we-media owner should apologize to and compensate the company whose reputation had been hurt.

In analyzing the case, the Supreme People's Court noted that defamatory remarks about the founder of an enterprise could amount to a damage to corporate reputation, as the two types of reputation are closely related to each other.

Corporate reputation, as the apex court rightly noted, is indeed a hard-won treasure for many businesses. Courts' categorical and timely crackdown on such cyber torts matters for the promotion of corporate confidence as well as entrepreneurial spirit.

For who would be able to concentrate on business development if a perpetrator of cyber defamation can easily get away with intentional or unintentional torts?

The six cases involving infringement of corporate rights to reputation came about a week before the country's top legislators would meet to review the draft of the law on private sector promotion.

Last October, China's Ministry of Justice and the National Development and Reform Commission published the draft law to solicit public opinion. As Xinhua news agency reported at the time, the draft, with 77 articles in nine chapters, features equal treatment and protection of private sector businesses.

On February 20, I looked up the draft again and found a clause clearly stating that the right to reputation – that of both a private business and its manager(s) – is entitled to legal protection.

The draft law also requires Internet service providers to establish and improve their complaint channels so as to appropriately handle illegal information that amounts to a malicious infringement of relevant parties' legal rights and interests.

Indeed, not just courts, but Internet platforms can play a big role in helping nurture a healthy development of the private sector by nipping illegal information in the bud.