A SHENZHEN company has been taken to court by fast-food giant KFC for allegedly using social media accounts to spread false claims about the quality of the food KFC serves, Chinese-language media reported yesterday.
The Shenzhen company is among the three firms that KFC filed a lawsuit against.
KFC, a unit of the U.S.-based Yum Brands Inc., is seeking a total of 3.5 million yuan (US$564,500) in compensation. The Shenzhen company is being asked to pay 1.5 million yuan in compensation, the highest among the three firms. The other two defendant companies are in Shanxi Province.
According to yesterday’s China Daily, KFC filed the lawsuit in a Shanghai court Friday, asking the three companies to immediately stop spreading the rumors, one of which said that chickens raised at the KFC farms were genetically modified to have six wings and eight legs. The fast-food giant is also asking for a public apology.
KFC said in its complaint that it was hard for companies to protect their brands against rumors because of the difficulties in collecting evidence, China Daily reported. The U.S. fast-food giant said the three companies had operated the accounts on the popular mobile phone app WeChat and this was a major obstacle to gathering evidence.
By the end of April, there were more than 4,000 postings against KFC on the public WeChat accounts. At least 130 accounts had such postings with view counts over 100,000, according to China Daily.
“It is not only seriously misleading consumers, but also harms the brand,” said a statement issued by KFC.
Tencent Holdings Ltd., the company that operates the WeChat service, declined to comment on the issue.
The legal dispute comes amid Tencent’s own efforts to fight rumors on the WeChat platform. In March, the social-networking giant issued a set of regulations that detail inappropriate and illegal behaviors that are forbidden on WeChat, China Daily reported.
The platform has 500 million active users, while corporate public accounts on the platform exceeded 5.8 million as of July 2014.
Yang Guang, who is in charge of security issues of WeChat, said in an April meeting, “It is difficult to root out rumors but WeChat will spare no efforts to deal with them.”
Yum Brands, the parent company of Taco Bell, KFC and Pizza Hut, has been struggling in China, where sales declined 6 percent in the first quarter. The company still says it plans to add at least 700 new stores in China.
Yum has launched several initiatives to attract more customers in China including a high-end restaurant, Atto Primo, in Shanghai. (SD-Agencies)
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