Hainan drug firm sues Tencent over derogatory posting

Internet giant Tencent Holdings Ltd may be facing a lawsuit from a pharmaceutical company based in Hainan province for allowing the spread of false information via its instant messaging platform WeChat.

In July, a WeChat post claimed that a medicine known as nimesulide granules, produced by Hainan Honz Pharmaceutical Co Ltd, had caused at least four deaths.

The drug is intended for the treatment of ear, nose and throat infections.

In early August, Honz reported the case to the local public security authorities, which determined that the rumor was false.

In December, Honz posted on its official WeChat account what it said was an apology from the source of the rumor as well as the case description from the local police to refute the rumor, but this move had little effect.

It then served notice on Tencent, urging the latter to delete, screen out and break the links of the false information, but it said it received little positive response from Tencent. The drug firm visited the headquarters of Tencent in mid-December to negotiate, it said, but was disappointed again.

As a result, Honz filed a lawsuit against Tencent. Haikou city's Xiuying District People's Court has put the case on record, the pharmaceutical company said on its official website on Tuesday.

Tencent told China Daily on Thursday that it had not received any legal claims.

Since the rumor spread on the Internet, sales of nimesulide have been heavily affected, as have sales of other medicines under the same brand, Honz told China Daily.

According to Guosen Securities Co Ltd, annual sales of nimesulide were about 100 million yuan ($16 million) between 2012 and 2014.

Honz is the largest nimesulide producer in China.

"With the rapid development of social media, which is represented by WeChat, rumors go viral due to the incomplete oversight system. It is quite difficult to monitor users' behavior and words on social media, let alone take any regulatory or administrative steps.

"If there are no effective measures taken soon, there will be more individuals and companies that are harmed by rumors. The task of refuting rumors will also become even more difficult," the company said in the response.

However, there appears to be a silver lining for the company. The Supreme People's Court in October issued a judicial interpretation regarding Internet infringement, in which the plaintiff could order the Internet service provider to give the name, contact information and Internet address of an Internet user who is suspected of infringement.

"Technically speaking, all the requirements set by Honz can be met," said Liu Haiyang, partner of the Guangzhou-based Guangda Law Firm, who is the attorney for Honz in this case.

"Tencent has the obligation to delete, screen out and break the links of the false information as an Internet service provider. As there is no precedent of a similar case, the case from Honz is very likely to set a precedent for later Internet infringement cases."