Beijing AIC Fines Nike for Having Double Standard: Update

Beijing AIC Fines Nike for Having Double Standard: Update

Posted: 30 Oct 2012 04:46 AM PDT

You remember this story from last week, right? Nike was fined by the Administration for Industry and Commerce (AIC) for . . . well, for something. It wasn't entirely clear to me, although a lot of folks were complaining about Nike having a "double standard."

Nike did falsely advertise that a shoe here had two air cushions in the sole, when there was really only one. I'm sure that makes a huge difference (yes, I'm being sarcastic). So we've got false advertising, potentially fraud. Advertising Law, Consumer Law violations, blah blah blah.

But what bothered me was the rhetoric from the AIC, which specifically included this "double standard" language. Apparently the two-air-cushion version of the shoe is being sold overseas, and at a lower price than the crappy, single bladder China version. The official said that China would not accept double standards.

I've kept my eye on some of the press reports on this ever since. It seems to me that multinational corporations have a whole lot of double standards when it comes to pricing and product features, but unless the products in question fall under specific regulations (e.g., price controls), I fail to see why this should trigger any sort of fine.

So here are a few choice quotes from the usual English-language local sources. If this makes any sense to you, please let me know:

International companies should increase their respect for the Chinese market as authorities begin to punish those who do business with a double standard in China, analysts told the Global Times[.]

Question: why?

According to China's Consumer Protection Law, Nike should pay one to five times the selling price in fines, and the consumers could be compensated with twice the selling price, according to Qiu Baochang, president of the legal panel at China Consumers' Association.

This has nothing to do with a "double standard," but rather the false claim made about the shoe's features.

Legal experts are calling for tougher punishments for companies that sell substandard and overpriced products in China.

When was it decided that one air cushion was substandard? And who determined that the price was unacceptably high?

"This is not only discriminatory to Chinese consumers, but also a violation of Chinese laws and regulations," said Yi Shenghua, a lawyer at Yingke Law Firm in Beijing.

"We should reflect on the regulatory system and government standards in the country while stepping up punishment for this kind of behavior," he said.

It might be a violation of law, but not one that involves discrimination. I think this guy is talking about two different things.

Xue Guifang, director of the board of consumer rights protection at the China Law Society, agreed, saying: "Industries, especially world-renowned businesses, should not only provide world-class products, but also first-class respect to consumers."

This guy is a "legal expert"? That quote is suspiciously bereft of any reference to an actual law. "World-class" and "first-class"? Please.

You know, I was beginning to be really disheartened by all this horrible news coverage and blather, but the Beijing News finally came through with a reasonable description of what actually happened:

Nike has been fined 4.87 million yuan ($779,700) for deceptive advertising in China, according to the Beijing Administration for Industry and Commerce recently.

One of Nike's high-end basketball shoes, which was advertised as double air cushioned, was sold at 1,299 yuan in China, more than 500 yuan higher than the price of the same model abroad. Moreover, the footwear sold in China only contained one air cushion.

Chinese consumers have long been annoyed by foreign brands' "double standards." However, the reason for Nike's fine this time is not double standards, but deceptive advertising. (from a Global Times translation) [my emphasis]

Finally, someone willing to be honest about what this incident was and what is wasn't. However, before I had a chance to get too excited, I read on and ran into this:

If we want to end foreign companies' "double standards," we have to make efforts in legal procedures.

I'm not sure what legal procedures or new laws would be appropriate, but at least this is an acknowledgment that Nike did not violate current law because of a "double standard."

I would question, though, what sort of legal regime people want. Chinese consumers should be guaranteed the lowest global price for any consumer product? If a product feature is offered to a consumer anywhere in the world, should the law mandate that the company offer that feature in China as well?

That sounds crazy, but maybe I'm missing something here.

Top 10 Search List (October 30, 2012)

Posted: 29 Oct 2012 11:56 PM PDT

1) 中国党政领导干部资料库 (Zhōngguó dángzhèng língdǎogànbù zīliàokù, China's database for government officials) – A database containing the profiles of and news stories on more than 1600 Chinese government officials was launched today. The domain name is gbzl.people.com.cn. Chinese story here.

2) 北斗小旋风 (béidǒu xiǎoxuànfēng, North Star Swirl) – North Star Swirl is the nickname given to ZTE's new Quad-core phone U950 Tegra, which costs just 999 yuan in China. English story here.

3) 王石(Wáng Shí, Wang Shi) –China's real estate tycoon Wang Shi is rumored to have divorced his wife. A photo of him and actress Tian Pujun sitting together intimately in a plane was posted online following the rumor. Tian is about the age of Wang's daughter and the two met at a business school. Tian worked as a consultant for a commercial real estate company. Another vocal real estate company owner Ren Zhiqiang, said "congratulations" on his weibo account. Chinese story here.

4) 深圳地铁霸座(Shēnzhèn dìtié bàzuò, seat hoarding in Shenzhen subway) – A young woman was caught on video lying down and taking up two seats in the subway in Shenzhen. She yelled at people who asked her to sit up, saying she is from Beijing and is related to a high-ranking official. Chinese story here.

5) 哈瓦娜呐(Hāwánànà, Hawanana) – See the story above about Wang Shi. Hawanana is said to be the weibo account for actress Tian Pujun. The ever-so-observant internet users found the photo of a cat on this weibo account and the cat looks exactly like the one on Wang's weibo. Chinese story here.

6) 黑嘉嘉(Heī Jiājia, Hei Jiajia) – Hei Jiajia (Joanne Missingham) is a player for the Bingsheng Cup, a female international Go tournament. The tournament invited Hei as the Oceania representative, because of her dual citizenship with Australia and Taiwan. The 19-year-old beauty played Pipa, a traditional Chinese instrument, during a dinner reception before the tournament officially starts. Chinese story here.

7) 申东靖(Shēn Dōngjing, Shen Dongjing) – Shen is a 29-year-old Taiwan singer who recently died of subdural hematoma. Many singers and entertainers went to his funeral to pay their respect. Chinese story here.

8）黎明 (Lí Mín Xúzíqí, Li Min Xu Zishan) – Hong Kong star Leon Lai is rumored to be back with his ex-girlfriend Xu Ziqi after divorcing his ex-wife Gaile Lok. Chinese story here.

9) 白灵蓝燕(Bái Líng Lán Yàn, Bai Ling Lan Yan) -Bai Ling is a Chinese actress known for her work in films such as The Crow, Red Corner and Wild Wild West, and in TV series such as Entourage and Lost. Bai was seen publicly kissing actress Lan Yan in a restaurant. Lan shot to stardom for Hong Kong's 3D X-rated movie "Sex and Zen." Chinese story here.

10) 濮存昕爱女 (Pú Cúnxīn àinǘ, Pu Cunxi's daughter) – Actor Pu Cunxi's daughter got married in Beijing today. Chinese story here.