Anne Zhang

    zhangy49@gmail.com

    SHENZHEN’S market watchdog upheld its decision to fine local Internet company Qvod 260 million yuan (US$41.8 million) for spreading pornographic material and copyright infringement.

    The financial penalty was instantly legally effective as it was announced Thursday, the market supervision administration said.

    Founded in 2007, Qvod is one of China’s most popular online platforms for watching and downloading video content.

    It has been accused of allowing users to watch pirated materials and pornographic content.

    The company, which boasts 300 million customers, reportedly generates a substantial portion of its profits by offering video products on its player without the consent of the producers.

    The market supervision administration proposed a fine of 260 million yuan on Qvod in May, about three times the company’s total turnover. The proposed hefty fine drew widespread attention.

    The administration held a non-public hearing on the case last Tuesday, in which the company argued against the accusations.

    The administration eventually upheld the penalty, however, because the materials Qvod offered in the hearing failed to prove that the company’s infringement was made unintentionally, officials said.

    Qvod must pay the fines to the city’s financial committee within 60 days. An overdue fee of 3 percent of the total fine (7.8 million yuan) will be added each day if the company fails to pay the fine on time, according to the law.

    The company could appeal against the decision if it wants, the administration said.

    Last year Qvod was fined 250,000 yuan for copyright infringement.