Walmart China has been fined 300,000 yuan ($47,218) for putting in place a default five-star ratings for products on the Sam's Club App. The Guangdong Administration for Market Regulation (GAMR) deemed that such false commercial publicity would deceive and mislead consumers.
The topic "Sam's club App gives default five-star rating for products" went viral on Twitter-like Sina Weibo on Thursday, having generated 170 million readings as of 4 pm.
"They should have been fined earlier. I found that every once in a while, bad reviews are deleted from Sam's Club App," Sina Weibo user "Weiaiweiyi" commented.
"Please check Sam's Club for any other violations of laws and regulations," a Sina Weibo user wrote. And other users also encouraged market regulators to look into Sam's Club's food security, tax payment, and fire safety compliance.
From between October 13, 2020 and May 17, 2021, Walmart (China) Investment Co used the App of Sam's Club to sell goods online. When users failed to record an active comment on the products they purchased within a designated period, the background system of Sam's Club App will automatically default to a five-star review, and add the rating into the evaluation system, which is displayed on the corresponding product page, according to an investigation conducted by the GAMR.
GAMR has ruled this to constitute false commercial publicity for product evaluation that deceived and misled consumers.
According to the provisions of the Article 20 of the Anti-Unfair Competition Law of the People's Republic of China, the law enforcement agency ordered Walmart China to stop the illegal act and imposed a fine of 300,000 yuan.
Walmart China was one of a number of firms to come under the competition law spotlight, with the GAMR stating that the case "has a good demonstration effect of interpreting law by case." Other cases included fresh food chain Qiandama.
Sam's Club found itself in hot water recently as in December, it was found to have removed certain products from Northwest China's Xinjiang Uygur Autonomous Region. The business later claimed "it did not deliberately remove goods sourced from the Xinjiang region." But the anger it sparked among Chinese consumers led to significant cancellations of Sam's Club membership across the country.