Chinese e-commerce platform Pinduoduo said Monday that it is planning to file a lawsuit seeking 10 million yuan ($1.4 million) in compensation from the publisher of an allegedly defamatory article, according to domestic media reports.
The Shanghai-based company accused Chaping — a publisher of business- and technology-related stories on social media — of running a “totally fake and inaccurate” article claiming that gambling websites were using Pinduoduo as a money laundering tool. According to the article published Sunday by Chaping, certain gambling websites ran vendor accounts on Pinduoduo as a cover for accepting electronic payments from gamblers.
“After conducting several tests in different stores (on Pinduoduo), we can confirm that payments from gamblers have flowed into the stores, turning it into a reasonable and legal income stream,” the article said. “In short, gambling websites are using this method on Pinduoduo to launder money.”
Pinduoduo dismissed the accusations and told Chinese media outlets Monday that all its vendors must register using their real names, allowing the platform to trace any suspected illegal activities. The company added that it had already suspended the vendor accounts mentioned by Chaping for “suspicious transactions” — without clarifying whether the suspicions pertained to gambling — before Chaping published the article.
Pinduoduo had not answered Sixth Tone’s questions sent via email and WeChat by time of publication.
Responding to Pinduoduo’s threat of legal action, Chaping on Monday said that it stands by the story and is “puzzled” by the potential litigation. In a follow-up post Tuesday on microblogging platform Weibo, Chaping said that its exposé was aimed at protecting people from falling prey to illicit gambling companies and wasn’t targeting Pinduoduo specifically.
“We have enough evidence to prove that it’s true,” an employee at Chaping told Sixth Tone on Tuesday. “We hope that Pinduoduo will solve this problem more directly than by tackling those who pointed it out.”
Launched in 2015, Pinduoduo markets itself as a social e-commerce retailer and has gained immense popularity in rural China for its bargains and group discounts. With over 418 million users, the company claims to be the third-largest e-commerce platform in China, according to its website. In July 2018, it raised $1.63 billion in an initial public offering on the Nasdaq Stock Market.
Editor: Bibek Bhandari.
(Header image: IC)