Safeguarding Corporate Reputation Through the Rule of Law — Lessons from the Pang Donglai Incident

The recent Pang Donglai incident has become a focal point of online discussion. An online influencer known as “Chai Dui Dui” alleged in short videos that the well-known supermarket brand Pang Donglai was selling jade at exorbitant, profiteering mark-ups, claiming to have evidence, and drew massive attention. In response, Pang Donglai publicly released sales data and pricing standards, even sent products for third-party testing, and promised unconditional returns if any quality problem was found, in an effort to dispel the rumours. Despite the company’s active efforts to clear its name, however, the other party did not relent but continued to publish aggressive remarks, further escalating the situation. On April 25, the Xuchang Intermediate People’s Court officially accepted Pang Donglai’s lawsuit against “Chai Dui Dui” for commercial defamation and infringement of reputation rights, claiming no less than 5 million yuan in damages. During the May Day holiday, Yu Donglai posted several updates in a row, not only angrily denouncing the false accusations but also stating that if he did not pursue legal accountability against the rumour-mongers, he would “proactively close or leave Pang Donglai.” After the Douyin platform intervened, Yu Donglai set his account to private, saying he “needed to reflect and calm down.” Currently, mainstream media including People’s Daily Online and Xinhuanet have successively published articles supporting Pang Donglai, reflecting opposition to online rumours and violence from both the public and official media. Even so, the incident starkly exposes the severe damage that online violence inflicts on corporate reputation and the difficulties enterprises face in defending their rights.

The Pang Donglai incident is not an isolated case. In recent years, many enterprises and entrepreneurs have been deeply troubled by online violence. When malicious rumour-mongering and smearing become a business, those who “throw mud and ride the traffic” come out ahead, while honest businesses are frequently picked on. How to establish and implement an effective mechanism for preventing and responding to online violence has become a question that corporate reputation governance cannot avoid. Enterprises and entrepreneurs often face several major dilemmas when confronting online violence:

• Smearing is easy while clarification is difficult: Online, a rumour can spread widely on the strength of a single post and cause a great uproar, while enterprises seeking to clear their names face enormous costs—publicly releasing internal data risks leaking trade secrets, and devoting staff and resources to clarification PR is expensive. Clarification is long and tedious, and may be read by some netizens as “whitewashing” or an admission of “guilt,” so that whether or not clarification works, corporate reputation may already have been irreparably damaged while public opinion was still building.

• Rights enforcement is costly while the returns are slim: The best outcome of clarification is simply to restore the position before the smearing. If enterprises pursue legal accountability against online rumour-mongers, they often face long timelines, difficult evidence collection, and high thresholds. Even if they ultimately win, the damages awarded are limited and enforcement is difficult, so many enterprises choose to endure and let matters drop because of the strain on time, energy and money. Some even pay privately to “settle things,” which only emboldens wrongdoers.

• The dilemma between speaking out and staying silent: When enterprises or entrepreneurs publicly “fight back,” they may face a secondary backlash in public opinion, being accused of “capital arrogance” or “hype”; while silence allows rumours to rage unchecked, with the brand image continuously damaged. Online, there is no shortage of voices on the “original sin of capital,” and entrepreneurs are easily criticised whatever they do, which forces many into silence. This creates a vicious cycle: wrongdoers are indulged, honest people fall silent, and the grey industry chain of rumour-mongering attacks becomes even more rampant.

• Legal risks of improper response: When facing online violence, if enterprises or their leaders lose emotional control or respond improperly, they may also cross legal red lines. For example, overly aggressive statements may be characterised as “improper rights defence” or attract regulatory attention. During a crisis, therefore, enterprises must both safeguard their rights and guard against new legal problems caused by overreaction.

Online violence puts enterprises and entrepreneurs in an impossible bind: not responding lets rumours spread, while actively defending their rights meets numerous obstacles. In this dilemma, only by making good use of the law and the rules can the damage that online violence does to corporate reputation be effectively curbed.

I. Using Legal Weapons to Safeguard Reputation Rights

Law is the most powerful weapon for safeguarding rights. When enterprises are infringed by online violence, they should promptly assert their rights in accordance with the law, making full use of the remedies available under current laws and regulations, firmly confronting rumour-mongers and slanderers, and defending their reputation. The options include:

1. Reporting to the police for public security violations: China’s Public Security Administration Punishments Law explicitly prohibits publicly insulting others or fabricating facts to defame others. Once verified, offenders may face detention of up to 5 days or a fine, and up to 10 days’ detention in more serious cases. For ordinary insults and defamation, enterprises can report immediately to the public security authorities, who may impose administrative penalties under Article 42 of the law. For example, malicious posts or videos that personally attack or publicly insult enterprises and their leaders constitute public security violations, and the police can be asked to summon the publisher and issue a warning or admonition, or impose administrative detention. Likewise, repeatedly sending insulting or threatening messages online to disturb another person’s normal life also falls within the scope of public security violations. Police intervention can quickly stop ordinary online violence and deter would-be perpetrators.

2. Using civil litigation to pursue tort liability: Against online rumours that seriously damage a company’s business reputation, enterprises should make active use of civil remedies and sue the infringers, demanding that they stop the infringement, remove the false information, restore the enterprise’s reputation, apologise publicly, and pay compensation. The Civil Code expressly protects the reputation rights and honour rights of citizens and legal persons; any organisation or individual that fabricates or disseminates false information to disparage another’s business reputation commits a civil tort. In practice, enterprises can bring reputation rights infringement actions or, where competitors maliciously smear them, unfair competition actions for commercial defamation in the people’s courts, requiring infringers to bear civil liability in accordance with the law. The threshold for filing such actions is relatively low (it is enough to show that the rumours are false and have caused damage), and even if the compensation finally awarded is modest, a winning judgment and a public apology serve to clarify the facts and vindicate the enterprise, helping to restore its reputation and warn others. Where necessary, enterprises can also apply to the court for conduct preservation measures (injunctions) requiring infringers and platforms to remove the infringing content immediately and prevent further damage. In the conduct preservation ruling in Xiaomi’s online tort liability dispute, for example, the court promptly ordered the respondent to delete the infringing articles and videos at once, preventing further damage to the reputation rights of a private enterprise, and the case was selected as a model case of the people’s courts’ protection of private enterprises’ property rights and entrepreneurs’ rights and interests in accordance with the law.

3. Filing criminal reports to punish extreme online violence: Where online violence is particularly egregious or has a major impact, criminal liability may be considered. China’s Criminal Law and related judicial interpretations set out clear criminal thresholds for online rumour-mongering, defamation, and insult: fabricating and spreading facts to defame others, where the circumstances are serious, constitutes the crime of defamation, punishable by up to three years’ imprisonment or criminal detention. “Serious circumstances” include situations where the same defamatory information has been clicked or viewed more than 5,000 times or reposted more than 500 times, or where it causes the victim to suffer mental breakdown, self-harm, or suicide. If enterprises encounter large-scale, organised rumour-mongering and smearing (for example, rumour videos going viral across the internet and causing widespread public misunderstanding, or enterprise leaders suffering serious physical and mental harm as a result) that meets the “serious circumstances” standard of the criminal law, they should report firmly to the public security authorities, requesting a criminal investigation on suspicion of defamation or insult and pursuing criminal liability against the primary rumour-mongers. Influential netizens who knowingly and repeatedly spread false rumours and incite online violence, as well as any “malicious PR” outfits operating behind the scenes, may commit the crime of “picking quarrels and provoking trouble” (for example, wantonly fabricating facts to disturb public order) or “extortion” (for example, threatening to expose scandals in order to extract benefits), and the public security and procuratorial authorities may pursue and punish them according to the specific nature of the conduct. The judicial policy jointly issued by the Supreme People’s Court, the Supreme People’s Procuratorate, and the Ministry of Public Security likewise reaffirms that online violence amounting to a crime must be prosecuted strictly in accordance with the law, and that those who wantonly infringe upon others’ reputation rights must not be allowed to escape justice. As the most severe means of combating unlawful conduct, a criminal report not only leads to criminal liability after the fact but can also effectively curb the further spread and continued harm of online violence while it is still developing.

4. Making good use of the new protections under the Provisions on the Governance of Online Violence Information: The Provisions on the Governance of Online Violence Information, which took effect on August 1, 2024, lay down dedicated rules for governing online violence. They require online platforms (online information service providers) to assume primary responsibility for governing online violence information, including establishing early-warning mechanisms, strengthening content review, and managing accounts. Platforms should promptly delete or block posts, comments, and videos containing online violence content such as insult and defamation; for accounts that publish online violence information, they should take measures ranging from warnings and functional restrictions to account closure, depending on severity, and place serious offenders on blacklists that bar re-registration. This means that when enterprises encounter online violence, they can rely on these provisions to complain to platforms and report the harmful information and accounts concerned, urging platforms to fulfil their statutory governance duties. After receiving reports, platforms are obligated to handle them promptly, including deleting infringing content, banning rumour-mongering accounts, and retaining relevant records for inspection. If platforms fail to act as required, cyberspace authorities and public security authorities may also step in to supervise. Enterprises should become adept at applying these new rules, requiring platforms to cut the transmission chain of online violence and forming a dual “law + platform” governance model.

From reporting to the police and filing lawsuits to lodging criminal reports and complaints, the law gives enterprises administrative, civil, and criminal remedies at several levels. In practice, the appropriate route should be chosen according to the severity of the online violence: ordinary insults and defamation can be reported to the police or pursued through civil litigation, while egregious rumour-mongering should be pursued criminally without hesitation. At the same time, measures should be combined—legal channels with public-opinion guidance, deterrence with education—to achieve the best result.

II. Making Good Use of Platform Rules and Resources for Effective Rights Protection

Beyond legal means, making full use of internet platform rules and resources to safeguard reputation is also an important part of an enterprise’s response to online violence. Online violence cannot exist without the dissemination channels of social media and content platforms, which are naturally well placed, and equipped with a range of technical and management tools, to govern the online ecosystem. Enterprises should act proactively, work closely with platforms, and move quickly to curb the spread of rumours and clarify the facts. Based on the authors’ experience, enterprises can take the following actions.

1. Report infringing content promptly: When false information or malicious attacks targeting the enterprise are discovered online, enterprises should complain immediately through the reporting channels the platforms provide. Major social platforms (such as Weibo, Douyin, and WeChat Official Accounts) all have content reporting and user complaint mechanisms, where a category such as “rumours and fraud,” “insults and abuse,” or “infringement” can be selected and evidence submitted. Under platform rules, once a report is verified, the platform will delete the violating content or block the infringing account. Especially since the new Provisions on the Governance of Online Violence Information took effect, platforms must handle information involving insult and defamation rapidly, leaving no grey area. Enterprises that make full use of reporting tools can shorten the time a rumour circulates to a matter of hours, preventing the situation from worsening.

2. Using platform rumour-debunking and review mechanisms: Many platforms have rumour-debunking mechanisms or content review teams that check the authenticity of widely circulated information and apply labels. If an enterprise finds rumours about itself spreading rapidly on a platform, it can contact the platform’s content management team or rumour-debunking channel and request fact-checking. Once sufficient evidence (such as inspection reports or official data) has been provided to show the information is false, platforms may add “disputed” or “debunked” labels to the content, or even issue announcements clarifying the truth. This helps reduce public misunderstanding and weaken the credibility of the rumour. In addition, while an incident is developing, enterprises should closely monitor what platforms are doing—for example, Douyin intervened in the mid-to-late stage of the Pang Donglai incident, deleting violating videos and restricting the spread of related topics, which gradually cooled public sentiment. This shows that, besides self-service reporting, enterprises can also press platforms through government departments or public appeals to the media, urging platforms to use their own rules to “stop the bleeding” as early as possible instead of letting traffic fuel the fire.

3. Making good use of official enterprise accounts to speak out: An enterprise’s official Weibo, WeChat Official Account, Douyin account, and other self-media accounts are important channels for direct external clarification and communication. When facing an online violence attack, enterprises should speak out quickly on their official accounts: setting out the facts, providing evidence to clear up misunderstandings, and stating a firm position on safeguarding their reputation. The tone should be calm and restrained, and the facts clear, in order to win the support of rational netizens. For example, Pang Donglai issued public responses continuously during the incident, explained the points under question in detail, and invited questioners to come and inspect on site, winning the understanding and support of many netizens. Once an official clarification is released, it can also be pinned and actively managed in the comment section. If the rumours have spread to multiple platforms, enterprises should speak out on all the major channels at the same time, ensuring full coverage and avoiding information silos. At the same time, the official statement can be shared with media outlets and self-media opinion leaders to widen the reach of authoritative voices.

4. Using media and PR channels for clarification: Beyond their own platforms, mainstream media and PR channels are also a necessary means of debunking rumours. Enterprises can prepare press releases for authoritative media, putting the facts and the results of fair investigations before the public and squeezing the space for online rumours through news reporting. For events with major impact, holding a press conference or accepting media interviews may be advisable, using professional and authoritative information sources to turn public opinion around. At the same time, contacting well-known self-media authors and PR opinion leaders in the industry and asking them to write objective analytical articles based on authentic materials helps clarify false accusations from a third-party perspective. These external voices are often more persuasive and can reach audiences that an enterprise’s own channels cannot. Note that when using media and PR, the content must be truthful and objective; exaggeration or inaccuracy may provoke fresh questioning.

5. Working with platforms to strengthen account management: Where online violence causes sustained infringement, enterprises should, besides having content deleted, also try to restrain the attackers at the source. Enterprises can urge platforms to take stricter action against instigators’ accounts under their community rules. For example, for accounts that frequently publish insulting and defamatory remarks, platforms should be asked to suspend or permanently ban the accounts and, as the regulations provide, blacklist them to prevent re-registration under different accounts. Platforms can also be asked to provide judicial authorities with the infringer’s account verification information or IP addresses (platforms have a duty to assist), facilitating later legal action. Platforms are also responsible for preventing interference by impersonation accounts: if someone maliciously impersonates an enterprise or entrepreneur to publish improper remarks, the enterprise should promptly appeal to the platform for handling, to protect its reputation. Through two-way cooperation between enterprises and platforms, a “dual blockade” can be formed against rumour-mongers’ accounts and identities, making it hard for them to stir up trouble again.

Through these measures, enterprises can build a “firewall” at the platform level and minimise the harm of online violence. Ultimately, platforms are arenas not only of public opinion but also of rules. Enterprises that make full use of the tools granted by platform rules are in essence turning force against force, bringing potentially uncontrollable public opinion into an orderly process.

III. Corporate Compliance Response Mechanisms Under Reputation Crises

Facing a sudden online reputation crisis, enterprises should establish compliant and efficient internal response mechanisms, being prepared and responding calmly. The following are suggestions from the authors’ practical perspective:

1. Rapid response and evidence preservation: Enterprises should immediately activate crisis response plans and designate specific personnel to monitor online public opinion. When unfavourable information is discovered, immediately take screenshots, recordings, and archives to preserve evidence (using notarisation or third-party electronic evidence platforms when necessary), including webpage links of the infringing remarks, publication times, view and comment counts, and other key information. Timely evidence preservation is crucial for later legal action and clarification. At the same time, quickly assess the spread and impact of the information and make a preliminary judgment on whether legal proceedings or an escalated response are needed.

2. Engaging professional legal counsel: In-house legal departments or external lawyers should step in immediately to characterise the online remarks in legal terms, determining whether they constitute rumour-mongering, defamation, insult, or other illegal acts, and which legal provisions are involved, to determine rights protection pathways. Legal teams can quickly draft lawyer’s letters to rumour-mongers, sternly demanding that they cease the infringement and remove the false content, and reserving the right to take legal action. This not only warns infringers but also demonstrates the enterprise’s determination to protect its rights. When litigation or a police report is needed, external lawyers should guide the preparation of materials and draft the complaint or report, ensuring that the legal measures are sound and compliant. Legal teams should also review every public statement the enterprise plans to release, to avoid improper wording that creates secondary legal risk. Legal teams that specialise in reputation governance should also be familiar with the rules of the mainstream platforms, so that they can guide and assist enterprises in dealing with them.

3. Internal coordination and unified messaging: Internal PR, legal, and management teams should work together and agree on unified external messaging to avoid confusion. Convene an emergency meeting to establish the facts, confirm that the company has committed no violation or fault in the matter concerned, and work out authoritative responses to the main points of online concern. Designate trained spokespersons (such as senior executives or the head of PR) to speak externally with one voice, so that employees do not get into arguments or make improper statements on social media. Internally, reassure employees, management, and shareholders and explain the company’s response plan, to stabilise morale and prevent rumours from triggering knock-on effects on operations.

4. Lawful and compliant PR communication: In handling a reputation crisis, adhere to PR strategies that are truthful, transparent, and lawful. Neither evade problems nor escalate conflict. PR teams should, on the basis of the lawyers’ advice, draft clarification statements or Q&A scripts that are rigorous yet warm, responding positively to public concerns. Avoid emotive language and confrontational wording, and persuade with reason. Where appropriate, express understanding of the feelings of misled netizens while stressing the company’s firm stance on protecting its rights lawfully and holding rumour-mongers liable, projecting rationality and resolve. Through compliant communication, the public comes to see the enterprise as “responsible, law-abiding, and unwilling to compromise.”

5. Seeking external support and joint voices: Collective response is one of the effective strategies for resisting online violence. Enterprises can approach industry associations, chambers of commerce, and similar organisations to report the situation and ask for support. In this incident, for example, Yonghui Superstores publicly voiced support for Pang Donglai, expressing willingness to stand together and jointly safeguard the industry’s reputation. Support from an industry organisation or a leading enterprise can both strengthen public trust in the victimised enterprise and send rumour-mongers a strong signal that the whole industry resists online violence. In addition, if an enterprise belongs to an internet industry association (such as the Shanghai Internet Industry Federation), it can invoke the association’s internal mechanisms, with the association approaching the relevant departments and platforms and calling for industry-wide self-discipline and a clean online environment. Such joint action can curb online violence at a higher level and reduce the pressure on individual enterprises “fighting alone.”

6. Cooperating with regulatory and judicial authorities: After an enterprise files a report or complaint, public security, market regulation, cyberspace administration, and other government departments may step in to investigate. Enterprises should cooperate actively and provide detailed materials to establish their innocence, such as product inspection reports, business contracts, and archived chat records. Once a case enters judicial proceedings (criminal or civil), the enterprise, as the victim, should likewise be careful in what it says, respect the judicial process, and refrain from reckless public comment on the direction of the case, to avoid being seized upon by opponents or being seen as interfering with judicial fairness. By cooperating in a compliant manner with official investigations, enterprises both show their law-abiding attitude and help cases proceed smoothly to a fair outcome.

7. Establishing long-term mechanisms: After the incident subsides, enterprises should draw lessons from it, improve internal systems, and, with lawyers’ guidance, establish long-term mechanisms for responding to sudden public opinion crises. This includes regular media literacy and legal risk training for employees, dedicated staff to monitor company-related online developments in real time, and annual retainers with professional PR and legal service providers to ensure an immediate response. Enterprises can also develop tiered response plans suited to their industry: responding at different levels according to the spread and harm of negative online information, with clear timelines, approval procedures, and responsible persons at each level. They should also exchange information regularly with peer enterprises, share intelligence, monitor the activity of professional malicious PR operators and repeat-offender accounts, and head off potential risks in advance. By building reputation risk control into the corporate compliance management system, prevention is achieved before problems arise.

In summary, enterprises need a calm, orderly, and lawful response plan during reputation crises, with early detection, rapid response, cautious speech, and an emphasis on cooperation. That means both wielding the blade outward for lawful rights protection and building compliance inside and outside the company. As the Pang Donglai incident shows, in facing online violence, entrepreneurs need both courage and wisdom—the courage to speak out and the rationality to act in accordance with the law. With the support of industry organisations and society as a whole, enterprises can make full use of legal weapons and platform rules to protect their reputation and repel the onslaught of online violence.

IV. Conclusion

In the internet age, there are no bystanders—every enterprise could become the next target of online violence. The internet, where “pressing keys should not hurt people,” should be orderly and civilised, requiring the joint efforts of enterprises, platforms, law, and all of society. As legal professionals in corporate reputation governance, we call upon entrepreneurs not to remain silent in the face of unjust attacks, but to make good use of the rights the law grants them and defend those rights bravely; we hope that the major platforms will earnestly fulfil their governance responsibilities, stopping violence and curbing rumours promptly; and we expect the judicial authorities to strike precisely at malicious online violence and restore a clean cyberspace. Lawful rights protection is not “being difficult” but a necessity for safeguarding the bottom line of commercial civilisation. The Pang Donglai incident sounds an alarm for enterprises while also bringing enlightenment: only by resolving problems within the framework of the rule of law can one both protect one’s own good name and help purify and improve the entire online ecosystem. We believe that as laws, regulations, and industry self-discipline continue to improve, enterprises will no longer fight alone, online violence will ultimately receive due punishment, and sincere operators can move forward with peace of mind.