Shanghai Police Crack Down on Online Defamation and AI-Generated Extortion Schemes Targeting Businesses

Shanghai police announced on July 3rd that they have successfully dismantled several criminal operations targeting businesses online, including extortion schemes that used artificial intelligence to generate false information and campaigns to discredit competitors.

One case involved a tech company that reported a self-media account for publishing untrue articles since April 2026. The account owner, identified as Wang, demanded 300,000 yuan from the company to remove the posts. After initially paying 310,000 yuan, the company found the articles continued, with Wang then seeking 2 million yuan for "consulting services." Investigation revealed Wang used AI tools to compile the fabricated content. He has been arrested on suspicion of extortion.

In a separate case, police investigated false information spread on social media about a handbag brand's quality. The investigation traced the origin of the negative comments to Deng, an employee of a media company, who was hired by Cheng, an employee of a rival leather goods company. Cheng had organized over a thousand negative posts targeting the competing brand. Cheng, Deng, and another suspect involved in organizing the online trolls have been arrested.

The Shanghai Public Security Bureau stated that these crackdowns are part of its ongoing efforts to improve the business environment by combating cybercrimes such as online rumors and hacking. The police are particularly focused on new methods, including the use of AI and deepfake technologies for creating fake corporate news.

Since the beginning of 2026, Shanghai police have investigated over 190 cases of cybercrimes against businesses, removing more than 1.4 million pieces of illegal information and providing cybersecurity services to over 12,000 companies.