How to Get Sued in China
Posted on August 23, 2007
Filed Under China Business, China Internet, China Law |
From the 16th to the 18th of August Skype had “an undetected software deficiency” that caused Skype to become “unstable from August 16, and as a result affected millions of Skype users around the world”, according to China Tech News. The article is about Tom Online, Skype’s Chinese partner, announcement that they have “worked out a compensation measure” for registered users of the Chinese version of Skype.
Superficially this is a strange occurrence. Software deficiencies, detected or otherwise, are commonplace. Software vendors grudgingly admit a problem, release a patch or an update, and blithely move on. Microsoft, for example, has made the release of patches and updates a routine, monthly event. So why would Tom Online not only apologize (but not really take responsibility), but actually plan to give free calls to people as compensation?
Because:
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1) They don’t want to get sued
2) They don’t want any negative publicity
China has embraced litigation with a vengeance. According to an article by Simon Montlake in the Christian Science Monitor there were 4.6 million consumer complaints last year in China. I don’t know how many wound up in court, but I’m quite confident that the number is substantial.
Two well-respected American technology companies, Dell and Symantec, have been sued in China. Dell, as this People’s Daily Online article explains, shipped laptops with a different processor than advertised. Symantec released an anti virus update that unfortunately labeled two Chinese Windows systems files as trojans. This caused the files to be quarantined and the computer wouldn’t boot (according to PC World.
According to the articles, the affected consumers felt that neither company had been responsive enough when they complained. Whether or not that’s true, both of them now have a public relations problem. Internet users in China has embraced bulletin boards and forums as a means of sharing their ideas and meeting new people. It’s also where they complain and commiserate. This has helped worsen the situation for Dell, according to China CSR:
According to Economic Daily News, in a short period of one week, a consumer complaint handling website in China has received about 60 complaints against Dell China for its postponement of deliveries. Showing the power of the Internet to build communities, a campaign called “10000 Consumers Suing Dell” is also being initiated online.
Dell has not publicly responded yet to this online user-based initiative.
Ouch! Symantec, while still being sued, has tried to make amends. Their compensation program, as described by Computerworld, had Symantec characterizing it as a success. The deadline for the compensation (free software and a 12 month license extension for the anti virus) was July 15, but they are still considering submissions.
So Tom Online has been smart about this. Rather than waiting for a lawsuit (which may still happen) they have decided to try to assuage any negative feelings as quickly as possible. If nothing else, they at least appear to be doing something. Indifference has a price, as the last paragraph of the People’s Daily article underscores:
An expert on law in Shanghai believes that Zhang’s (the man suing Dell) appeal is exemplary. When consumers take the same action, Dell will be involved into class-action lawsuit. “If consumers win, it will force multinationals to soften their long-held arrogance toward Chinese consumers and make it easier for Chinese customers to protect their rights,” said the expert.
“Long-held arrogance” by multinationals? If that’s the Chinese public’s perception of international firms in China, they all better lawyer-up.
Further Reading
China Law Blog. Highly recommended.
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