news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

Image source: Photo Network

The anti-corruption campaign has reached major Internet companies

From the beginning of the year to date

Xiaomi, Tencent, Douyin and other Internet giants

"Anti-corruption report cards" have been released one after another

Small things like falsely reporting overtime meal expenses and taxi fares of several hundred yuan

As big as accepting bribes of tens of millions of yuan

From the traditional use of position to embezzle company property

To use fake orders to make arbitrage and get free stuff

Send gifts, promote popularity, etc.

New corruption tactics

More and more surfaced

With the rapid development of the industry

Corruption has been “diagnosed”

The "big company disease" that restricts the development of Internet companies

Major companies are speaking out to cure the "disease"

This means that more and more companies are beginning to reflect

The “granularity” of anti-corruption

Is it aligned with the growth rate of the enterprise?

Internet companies have become a new hotbed for internal fraud crimes

How much power does an ordinary employee of a leading Internet company have?An internal corporate corruption case disclosed by the Hangzhou police in Zhejiang Province in May this year gave a shocking answer - in just one year, an employee of a company, Wang, received bribes from businesses totaling more than 92 million yuan.

The reason why Wang was able to obtain astonishing illegal profits so quickly was that he held an approval power: to conduct preliminary review of merchants' stores entering his e-commerce platform.

"Ordinary employees converting approval power into huge profits is a microcosm of corruption in large Internet companies.As an important driving force for the current Internet economy and digital development, large companies have a certain scale and industry influence. Their corruption issues have an important impact on economic and social development, especially industrial innovation, and are also conductive. Therefore, they have become the focus of anti-corruption efforts in private enterprises. "Song Wei, director of the Anti-Corruption Research Center of the University of Science and Technology Beijing, said in an interview with Fangyuan.

Case handling data obtained by "Fangyuan" reporters from the procuratorates in Beijing, Shanghai, Zhejiang and other places show that the number of criminal cases involving private enterprise operations and internal fraud has been increasing year by year. The companies involved are concentrated in the tertiary industry with high economic activity, and Internet companies have become a new hotbed of internal fraud crimes.

According to relevant personnel from the Beijing Municipal Procuratorate, the Beijing Municipal Procuratorate has recently launched a special campaign to combat and control commercial corruption crimes in Internet companies. Since May 2023, procuratorates across the city have handled 126 cases involving 207 people involved in commercial corruption crimes in Internet companies.

“In recent years, corruption problems have been prevalent in major Internet companies, becoming a major issue restricting the development of the Internet industry, seriously affecting the healthy development of the industry, disrupting the order of fair competition, and damaging the rights and interests of consumers.Not only is the number of cases on the rise, but the number of cases involving huge or particularly huge amounts of money is also increasing." Song Shanshan, a prosecutor at the Xuhui District Procuratorate in Shanghai, told Fangyuan.

In Song Shanshan's view, most large Internet companies are large-scale start-up or high-speed development technology companies, with the characteristics of short establishment time, high operating activity, and sufficient asset liquidity. Although the risk control structure is relatively stable and complete, there are risk factors such as hidden rent-seeking means, online rent-seeking space, virtual rent-seeking costs, and high rent-seeking realization amounts, which cause employees to frequently put themselves in danger.

"The development of large companies is a process from barbarism to standardization. In the early days, when large companies were expanding rapidly, they did not pay too much attention to corruption, but instead focused on core work such as research and development and promotion.However, the long-term development of enterprises must be carried out on the track of legalization and standardization. External expansion requires stability in the rear, and internal anti-corruption issues are gradually being taken seriously.. "Song Shanshan said.

Traffic corruption is surging

"Fangyuan" reporters learned that compared with traditional commercial corruption which is often concentrated in key positions such as corporate executives, sales, finance, and key links such as commodity circulation, corruption in large Internet companies is closely related to characteristics of the Internet industry such as operational services, traffic monetization, and data rights.

"From the cases we have handled in recent years, we can see that Internet giants have a large amount of virtual property that is invisible and intangible, but there is an undercurrent of 'traffic is king'. Traffic can be monetized, which means that the corresponding power can also be monetized."

Zhang Hong, a prosecutor at the Xuhui District Procuratorate in Shanghai, believes that compared with the tangible physical property of a company, the props, currency, and skins in game companies, and the arbitrage, wool-pulling, gift-giving, and traffic required for promotion in e-commerce companies are all virtual property.The embezzlement of these virtual properties is a new type of corruption in large Internet companies.If enterprises do not follow up supervision and verification, it will not be easy to detect and may cause economic losses.

For example, the court handled a case in which an employee of a large Internet company illegally appropriated game "diamonds". In July 2014, Zhou Moumou joined Company A as the head of the game project team. His backend account had the authority to directly issue "diamonds" to players and recharge reward props. In order to seek illegal profits, he used the company's backend to find the player ID and sold "diamonds" to players at a discount price lower than the official price.

According to statistics, from April 2019 to March 2023, Zhou made an illegal profit of more than 2 million yuan by selling "diamonds".In November 2023, after the Xuhui District Procuratorate filed a public prosecution in accordance with the law, Zhou Moumou was sentenced to four years in prison and fined RMB 40,000 for the crimes of embezzlement and theft.

"With the continuous development of new forms of digital economy, many Internet companies have businesses related to live streaming e-commerce, and there is a huge room for rent-seeking. Cracking down on corruption in the live streaming e-commerce field, such as large company operations managers accepting bribes, will help build a healthy and orderly live streaming economic ecosystem." said Wang Chanyuan, prosecutor of the Haidian District Procuratorate of Beijing.

In a case of bribery of employees of a large company handled by the court, from July 2021 to November 2022, Wan Moumou took advantage of his position in charge of live broadcast management and account maintenance, and solicited or illegally accepted property from several e-commerce anchors under his management in the name of borrowing money, buying houses, buying cars, etc., and provided the anchors with assistance such as quick unblocking and quick addition to the "white list", and accepted money from the above-mentioned anchors on multiple occasions, totaling RMB 3 million.

On June 15, 2023, the Haidian District Procuratorate filed a public prosecution against Wan Moumou for suspected bribery by non-state employees. Wan Moumou was later sentenced to five years in prison and fined RMB 300,000.

“In an era where traffic is king, advertising traffic is a huge source of income for some Internet giants. It may seem like just an ad space, but it is hard to get one, and behind it is a complex platform economy.”

An employee of a large Internet company revealed to Fangyuan reporters that the platform will classify advertisements, including whitelist, blacklist and graylist. The whitelist contains legal advertisements, while the blacklist violates the Advertising Law and is not allowed to be placed. However, although the graylist advertisements do not violate the Advertising Law, they are not allowed to be placed according to the platform's internal regulations, such as those for strengthening virility, increasing height, and losing weight.

“However, when browsing the platform, people occasionally see content that should not be seen.These black and gray advertisements have been packaged so that they appear to be normal food, clothing, etc. when reviewed by the background department, and can be placed normally.So how did it change from black and gray ads to white ads? This is a new corruption method that is now brewing on the platform." said the employee.

This is the case with a bribery case involving a staff member of a large company handled by the Xuhui District Procuratorate of Shanghai. The bribee was an advertising traffic delivery staff member who used his power to circumvent the company's advertising review rules and delivered banned advertisements. He received a bribe by opening an account. The briber paid the bribe in order to increase the recommendation rate of the advertisements. He used the bribe money to make huge profits and disrupted the normal market operating order.

The Internet makes corruption more covert

“The corruption problem in Internet giants has certain regularity, such as transferring improper benefits internally or externally based on the technical means of the enterprises., such as data trading, fake orders for profit, illegal dispatching of orders, etc., so it is also highly concealed. "Song Wei believes that due to the large scale and wide influence of Internet platform companies, they have gradually formed a certain degree of monopoly advantage, and internal employees have used this advantage to seek improper benefits, such as receiving benefits to help merchants to promote top products.

At the same time, in the internal management and operation of large factories, due to the rapid expansion of scale and the lack of sound systems, various types of corruption have emerged in the management and operation, such as embezzlement of funds and recruitment bribery. This type of corruption is essentially no different from corruption within other private enterprises, but is relatively prone to occur in large factories.

"Corruption is a common problem that has gradually been exposed in the rapid development of large Internet companies. Currently, the main perpetrators of corruption cases in large Internet companies are young and middle-aged people, and the trend of younger people is gradually emerging."Zhang Hong said that on the one hand, ordinary employees showed the characteristics of "fly-and-ant crimes" in low-level and capital-intensive positions such as cashier, purchasing, and warehouse management. On the other hand, there were many middle-level managers such as managers and project leaders among the criminals, and their positions were concentrated in capital-intensive management departments such as sales and finance.

“This is because although middle-level managers have less management and decision-making authority than senior executives, they have a deeper understanding and exposure to grassroots business links and flows. They have more opportunities to handle company property in their daily work and are more likely to exploit business loopholes to commit crimes.”

Zhang Hong said that, for example, in large technology companies, some senior investors do not actually understand the programs and codes, and the regulators do not understand them either. Technical personnel, middle-level personnel and other key positions actually have a large amount of authority and virtual assets.The high level of professionalism makes the technical means of Internet corruption more covert, the criminal behavior spans a long time, and the case discovery cycle is generally 2 to 3 years.

"If the internal risk control system of a large company is not sound, monitoring and early warning are not timely, and electronic data and other evidence are lost, a lot of evidence may be gone when accusing the crime." Zhang Hong said, "In our investigation, we can clearly feel that corruption cases in large Internet companies are becoming more difficult and complicated. The new business model of 'Internet + industry' has made the means of crime online and virtual. Internal personnel, especially those in key positions, can 'cash in' their power for illegal gains as long as they control any link such as traffic approval, allocation, and account unblocking."

"In addition to the covert means of crime, corruption cases involving large Internet companies also frequently involve joint crimes involving internal and external collusion. Internal and external personnel of large Internet companies, and upstream and downstream companies in the supply chain are connected to each other, and it is common for them to plan and agree in advance and collude in testimony and defense afterwards, which makes the case complicated and significantly increases the difficulty of handling. Most of them are cases of collusion, involving multiple crimes. When the defendants enter into an offensive and defensive alliance and deliberately forge and destroy evidence, it is very difficult to collect and fix evidence and restore and identify the facts of the crime. There are also certain qualitative disputes or conflicts of laws in the application of the law." Zhang Hong said.

How to define corruption among non-state employees

"Corruption in large Internet companies reflects the flat organizational structure of Internet companies. There are fewer corporate levels, which reduces approval levels and communication costs. However, it also leads to relatively concentrated powers of staff at each level and insufficient mutual constraints in business processes." Wang Chanyuan, a prosecutor at the Haidian District Procuratorate of Beijing, told reporters.

So, how should the corruption of employees of large companies, who are non-state employees, be characterized?

"Corruption within Internet giants corresponds to crimes that may be committed by internal corporate personnel, such as embezzlement, misappropriation of funds, and bribery of non-state employees. Judging from the charges in the cases accepted, they are mainly concentrated on embezzlement, bribery of non-state employees, and bribery of non-state employees."

Wang Chanyuan said that one of the important contents of the amendment to the Criminal Law (XII) is to improve the criminal provisions related to corruption among internal personnel of private enterprises, which not only has an effective deterrent effect, but also plays an important guiding role in the legal operation of related enterprises.

In the view of Ma Weiwei, deputy chief prosecutor of the Jing'an District Procuratorate of Shanghai, corruption in private enterprises is often discovered by the enterprises themselves and then transferred to economic investigation and finally to the procuratorate. It is not done by an inherent agency, and the enterprises' own investigative means are also limited.

thereforeCorruption cases involving private enterprises face challenges in verifying clues, recovering stolen money and losses, and collecting and consolidating evidence. How to improve the verification of clues, recovering stolen money and losses, and collecting and consolidating evidence just demonstrates the prosecutorial agency's strength in punishing crimes.

"In handling corruption cases involving large Internet companies, the procuratorate combined the characteristics of the new Internet economic model, accurately characterized the cases, and severely punished internal corporate corruption. In response to the internal corporate corruption problems exposed by the cases, procuratorial recommendations were issued to encourage companies to establish rules and regulations and plug loopholes, creating a more equitable legal environment and providing better legal guarantees for the healthy development of Internet companies and industries," said Zhang Hong.

According to relevant personnel from the Beijing Municipal Procuratorate, in order to steadily advance the "Prosecution to Protect Enterprises" special action, serve and safeguard Beijing's construction as a global digital economy benchmark city, find the right way to implement "Prosecution to Protect Enterprises", and continuously inject the "rule of law gene" into the digital economy, the Beijing Municipal Procuratorate has recently launched a special campaign to combat and control commercial corruption crimes among Internet companies. It not only severely punishes commercial corruption crimes in accordance with the law, empowers digital prosecution with "multiple investigations in one case", but also helps Internet companies build integrity and actively carries out legal publicity against commercial corruption.

How can Internet giants align their anti-corruption efforts with “granularity”?

The procuratorate's approach undoubtedly aligns its "granularity" with the anti-corruption pace of major Internet companies.

With the rapid development of the Internet industry, the scale of enterprises has gradually expanded, the complexity of business has continued to increase, and major Internet companies have continued to increase their efforts in anti-fraud work. For example, Tencent has set up a special anti-fraud department internally and formulated strict anti-fraud policies and regulations. Alibaba has a special department responsible for corruption investigation, prevention and management. Huawei has adopted a three-line defense strategy in anti-fraud, including self-discipline of business managers, monitoring by internal control and risk supervision departments, and in-depth review by the internal audit department.

"The internal anti-corruption storm launched by the Internet giants is unprecedented in terms of the number of people involved, the high level of employees involved, and the intensity of the internal anti-corruption efforts. It reflects their high attention and firm determination to fight corruption."

Peng Xinlin, deputy director of the Institute of Chinese Criminal Law at Beijing Normal University, told Fangyuan that anti-corruption efforts by Internet giants are related to the core interests and long-term development of the companies. By investigating and reporting these internal corruption cases, those who violate the law will be handed over to judicial authorities for handling in accordance with the law.

On the one hand, it can remind and warn employees to adhere to corporate systems and integrity bottom lines; on the other hand, it can show the outside world that the company has a zero-tolerance attitude towards corruption, enhance the company's soft power, and create an honest, fair, and just business environment.

At the end of July 2023, the Supreme People's Procuratorate issued the "Opinions on punishing and preventing crimes by private enterprise internal personnel from infringing on the legitimate rights and interests of private enterprises and creating a good legal environment for the development of the private economy", and formulated 12 procuratorial measures. In this regard, Peng Xinlin said that in the process of combating corruption in large factories, the procuratorate must strictly handle cases in accordance with the law, and punish and prevent crimes by private enterprise internal personnel from infringing on the interests of enterprises in accordance with the law.

In conjunction with the special action of "Prosecution to Protect Enterprises" deployed by the Supreme People's Procuratorate, the procuratorate should adopt more pragmatic procuratorial measures, equally protect all types of market entities in accordance with the law, and actively create a business environment based on the rule of law.

Peng Xinlin also suggested that enterprises should strengthen the construction of anti-corruption systems. Specifically, it is necessary to start with strengthening the construction of anti-corruption education systems, supervision systems, prevention systems, and punishment systems within enterprises, put the power of employees, especially senior executives, into the cage of the system, plug the system loopholes that allow corruption to occur, strengthen the restraint and supervision mechanism on the power of employees, especially senior executives, form an early warning system to prevent corruption within enterprises, and improve the punishment mechanism for investigating and handling internal corruption.

"Corruption governance in large Internet companies is systematic and complex. First, from the perspective of national governance, we must further improve the relevant supporting systems to effectively constrain related corrupt behaviors; second, we must accelerate the construction of the integrity system of Internet platform companies, combine the development trend of digital technology, form a more scientific internal corporate governance structure, reduce internal corruption risks, and comprehensively improve the company's anti-corruption capabilities; third, we must increase the punishment of corporate corruption, insist on investigating both bribery and corruption, further clarify the standards for filing cases of corporate corruption, and produce a stronger deterrent effect." Song Wei said.

The original title of this magazine article: "Beware of the "undercurrent" of corruption under the flow of traffic"