A joint investigation team in Hefei, the capital of East China’s Anhui Province, announced on Thursday that it will confiscate illegal profits and impose a fine totaling 68.9491 million yuan ($9.83 million) on Three Sheep Group, a company established by online influencer Zhang Qingyang. The company has recently faced criticism for false advertising.
The company apologized for misleading consumers and promised to conduct a thorough internal review and protect consumers’ legal rights.
On Thursday, short video platform Douyin stated that it has suspended the livestreaming function of Three Sheep Group’s account since September 21 and will urge the company to undertake self-correction and properly address after-sales compensation issues for consumers.
According to the statement, Three Sheep Group marketed mooncakes from the Meisun Fine Cake brand as having “over 20 years of history” and being a “Hong Kong-based product.” However, the mooncakes are produced in Guangdong Province and are not sold in Hong Kong.
Three Sheep Group also promoted an “Australian grain-fed beef roll” product as original meat without obtaining the original meat inspection report, and the product actually contains a mixture of meat.
The investigation group identified these two cases as false commercial advertising, and another case involving discrepancies between some shipped products and advertised items is under further investigation.
Beyond the penalties, the investigation team required Three Sheep Group to initiate rectification within a specified timeframe and assume legal responsibility. Disciplinary inspection and supervision departments will investigate individuals who neglect their duties in accordance with relevant laws and regulations, according to the statement.
On September 17, Hefei’s market supervision administration began investigating Three Sheep Group for allegedly “misleading consumers” during its livestream sales on the Douyin social media platform.
Analysts suggest the incident serves as a cautionary tale for the livestreaming industry and will help promote stricter regulations and reforms.
