(Yicai Global) Dec. 3 -- Chinese online used car trading platform Guazi is facing a CNY12.5 million (USD1.8 million) fine after it failed to back up claims of being the country's largest such marketplace.
The amount is how much Beijing-based Jinguazi Technology Development, which owns Guazi, spent on a 15 second advertisement that ran from Sept. 7, 2016 to Dec. 28, 2016, the Beijing Municipal Administration of Industry and Commerce said in a statement. The ad claimed the company had a larger trade volume than its peers after a year of operations.
Guazi submitted data to authorities showing it facilitated 85,874 vehicle sales between August 2015 and July 2016 in a bid to validate its claims, but the regulator was not convinced.
The firm has appealed the decision, saying it did not attempt to attract public attention with fake ads, did not infringe on consumer rights or benefit through unfair competition. It also now describes itself as simply a "sector leader" on its website.
Jinguazi set up Guazi to improve transparency in the sector and enhance trading using capital investment and internet technology.
It engaged in an ad war almost immediately after forming and plowed CNY1 billion (USD144 million) into advertising each year to raise awareness of the second-hand car market, according to founder Yang Haoyong. Some of the claims it made, such as having a higher trade volume than peers and being a national industry leader, have provoked several lawsuits.
Editor: James Boynton