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Chinese Market Regulator Fines Douyin, Kuaishou For Publishing Controversial Micro Loan Ad

Short video app operators Douyin and Kuaishou were each slapped with a US$31,000 fine for violating China's advertising law The controversial micro loan ad that the two firms published was produced by JD Technology, the fintech arm of JD.com

Chinese Market Regulator Fines Douyin, Kuaishou For Publishing Controversial Micro Loan Ad

China's two largest short video-sharing app operators, Douyin and Kuaishou Technology, have each been slapped with a 200,000 yuan (US$31,088) fine by regulators for publishing a controversial micro loan advertisement that encouraged "excessive consumption", according to government records.

The fines were handed on October 11 by a branch of the State Administration for Market Regulation (SAMR), in the Haidian district of Beijing, for violating China's advertising law, which bans campaigns identified by authorities as "disturbing the public order or going against a good social climate". Both Douyin, run by TikTok owner ByteDance, and rival Kuaishou are headquartered in Beijing.

The advertisement features a man of modest means inside an aeroplane with his mother. Worried about his airsick-prone parent, the man takes out an instant loan of 150,000 yuan via a JD.com app to get her an upgraded cabin seat.

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Campaign producer JD Technology, the financial technology arm of e-commerce giant JD.com, had apologised for the advertisement in December last year, when it went viral and panned for being insensitive to people of low income. In July, regulators slapped JD Technology with a 400,000 yuan fine for the commercial.

SAMR regulators also confiscated revenue of 39,400 yuan and 74,200 yuan, respectively, from Douyin and Kuaishou, according to the companies' records on the state-owned National Enterprise Credit Information Publicity System. It described the behaviour of the two app operators as having "serious value problems that preached incorrect orientation, such as excessive consumption".

Neither ByteDance nor Kuaishou immediately responded to requests for comment on Tuesday.

The action taken by SAMR against Douyin and Kuaishou reflects Beijing's effort to strengthen governance of the country's cyberspace, bringing ideology, culture, moral standards and online behaviour under control.

That followed the joint release in September of a new set of guidelines by China's Communist Party and the State Council for building a "cyberspace civilisation", which seeks to increase control over online content amid Beijing's wider campaign to rein in the country's internet giants.

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This was not the first time that Douyin and Kuaishou were fined for inappropriate advertising content.

In August, Kuaishou was slapped with a 22,500 yuan fine for publishing advertisements for off-campus tutoring services and bubble tea chain shops that offered unrealistic promises.

Douyin was handed a 30,000 yuan fine in July for overstating the platform's popularity.

Other forms of online advertising campaigns have also been the target of government scrutiny. The Chinese subsidiary of Sony Group Corp, for example, was fined 1 million yuan last week for initially promoting its new domestic smartphone launch on the same date that Japan invaded the country 84 years ago.

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