The Chinese government has fined Sina.com and made arrests in connection with an investigation that alleges the site facilitated the distribution of pornographic content.
Though China has a well-established history of banning online content, its decision to levy a punishment against Sina so soon after the successful initial public offering of Weibo, its microblogging platform, earlier this month, is notable because the company said in its IPO filing that censorship was a potential barrier to monetization and growth.
According to Xinhua, the Chinese government’s official news service, the National Office Against Pornographic and Illegal Content released a statement that said it had received “a huge amount” of public tip-offs that Weibo, the influential microblogging platform and news portal that Sina operates, had released 20 articles and four videos with lewd content.
As a result, the State Administration of Press, Publication, Radio, Film and Television rescinded two licenses that allowed Sina to publish online content, including articles, ebooks, and video, and imposed large fines. Furthermore, several people were arrested in relation to the investigation.
News of the investigation comes just 18 days after Sina Weibo had its IPO on NASDAQ. Shares of Sina Weibo fell 4.5% to $20.44 yesterday, but began to recover in after hours trading. China is currently in the midst of its annual “Cleaning the Web” campaign, but the WSJ notes that this is the first time the government has used the campaign to attack one of the biggest domestic Internet companies. The fine and arrests may be meant to send a signal to Sina’s peers, which include Baidu, Alibaba, and Tencent.
An official told Xinhua that the amount of the fine had not been determined and that Sina can appeal the decision. In a public statement, Sina offered an apology “to all netizens and the public” and that it would “obey the punishment without passing the buck.”
In its IPO filing, Sina had said:
“Although our active user base has increased over the past several years, regulation and censorship of information disseminated over the Internet in China may adversely affect our user experience and reduce users’ engagement and activities on our platform as well as adversely affect our ability to attract new users to our platform. Any and all of these adverse impacts may ultimately materially and adversely affect our business and result of operations.”
Sina.com was punished twice last year for spreading publications with censored content. This time, officials said that the company had “not learned a lesson at all and [turned] a cold shoulder on social responsibility.” It added that Sina.com “overstepped the red line of law… and it must be punished in accordance with laws.”