China regulator to launch campaign to clean up e-commerce, online ads

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Chinese authorities will launch a campaign to clean up e-commerce – targeting trademark violations, counterfeit and poor quality products and the faking of transactions to boost a merchant’s online rankings, the official People’s Daily said.

It did not name any specific companies but the move has the potential to affect internet firms such as Alibaba Group Holding Ltd (BABA.N), Inc (JD.O) and Baidu Inc (BIDU.O).

The campaign by the State Administration for Industry and Commerce will run from May to November, the paper said.

The regulator was quoted as saying it would step up its oversight and give out harsher punishments for those found in violation of regulations.

It also called out false and illegal advertising online, according to the People’s Daily, a subject which has caused controversy this week.

Chinese search giant Baidu is being investigated by the country’s internet regulator over the death of a university student who used the Chinese search engine to look for treatment for his cancer.

Before dying, Wei Zexi accused Baidu online of promoting false medical information, as well as the hospital for misleading advertising in claiming a high success rate for its treatment.

A Baidu spokeswoman declined to comment on Thursday about the move by SAIC. Alibaba did not immediately respond to a request for comment.

A spokesman said: “Our business model targets the scourge of counterfeits and we support efforts to protect consumers, wherever they may shop online.”

Chinese authorities regularly launch such campaigns, and this is not the first to target e-commerce, though their effectiveness is not always obvious.

Alibaba will announce its earnings results for the first three months of 2016 on Thursday. will announce its results for the same period on Monday.

(Reporting by Paul Carsten; Editing by Clarence Fernandez and Edwina Gibbs)