Practical Implications for Users
For individual users publishing AI-generated content:
- No “AI-Generated” Defense: Users cannot rely on AI authorship alone to avoid liability.
- Affirmative Duties Recognized: Users have enforceable obligations to verify content accuracy and provide conspicuous labeling.
- Low Revenue Does Not Eliminate Risk: Even minimal monetization does not protect users from liability.
- Control Equals Responsibility: Liability attaches to the person who controls dissemination of the AI-generated content.
This ruling signals a clear policy direction: users who publish AI-generated content that causes competitive harm are legally responsible, regardless of the AI tool used.
Industry-Leading Perspective
Although the court’s liability focus is the individual user, the implications for companies deploying AI and AI vendors are significant:
- Companies deploying AI should implement clear AI-use policies, internal review procedures, and training for foreseeable “hallucination” risks.
- AI vendors should provide transparent disclaimers, risk communication, and contractual allocation of responsibility.
The ruling reinforces a structural principle in AI governance: control over publication equals primary legal responsibility, but secondary liability or indemnification may arise within the user–company–vendor ecosystem.
This case illustrates how traditional competition law is adapting to generative AI, while highlighting that accountability now extends across the AI deployment chain.
I. Key Issue
When a user generates content using AI and publishes it:
- What duty of care does the user owe?
- If the user fails to fulfill that duty, should the user bear legal responsibility?
II. Court’s Interpretation
Generative AI is a content production tool. Under current technological conditions, AI hallucinations are difficult to eliminate entirely.
To prevent the dissemination of false information from harming others’ lawful rights or disrupting market order, users who create and publish AI-generated content bear a reasonable duty of care in connection with dissemination and use.
Specifically, users must fulfill:
1. Duty to Review (Verification Obligation)
- Verify the authenticity of AI-generated content;
- Filter out false information;
- Ensure the truthfulness and completeness of disseminated information.
2. Duty of Conspicuous Labeling
- Add textual prompts or symbols at the beginning, end, or appropriate locations;
- Add conspicuous notices in the interface or around the content indicating it is AI-generated and may contain uncertainties.
This requirement is grounded in Article 4 of the Measures for the Identification of AI-Generated Synthetic Content (《人工智能生成合成内容标识办法》).
Failure to comply—resulting in the dissemination of false information that harms market participants—constitutes unfair competition.
III. Case Background
The plaintiffs were:
- Alibaba Group Holding Limited, a globally well-known e-commerce company; and
- Hangzhou Alibaba Advertising Co., Ltd., its affiliate.
The defendant operated a Baidu “Baijiahao” account promoting technology and digital products. The account had ~67,000 followers, 256,000 cumulative likes, was signed with an MCN agency, and was certified as a “Red V” account.
On December 30, 2023, the defendant published an article titled “Is Ali Digital Holdings Co., Ltd. Real?” claiming the company existed and was closely affiliated with Alibaba Group.
- The article generated 785 monetized reads and RMB 1.59 revenue.
- The defendant stated it was entirely AI-generated via the “Wenxin Yiyan” application and left the text unmodified.
The court found:
- The referenced company was a third-party entity with no affiliation to the plaintiffs;
- The AI source was only marked in the backend; no front-end notice was provided;
- The defendant manually added images showing “Alibaba Alibaba.com” and the plaintiffs’ brand logo, enhancing the misleading effect.
IV. Court’s Holding
1. Applicability of Article 2 of the Anti-Unfair Competition Law
Article 2 functions as a general clause establishing fundamental market competition principles and regulating novel, non-typified forms of unfair competition.
Subjective Fault
- The defendant published the article to attract traffic and generate commercial benefits.
- Despite knowing it was AI-generated and unreliable, he failed minimal review and conspicuous labeling.
- Manual addition of plaintiff brand images increased misleading impact.
Objective Harm
- The alleged relationship described could be verified via basic corporate searches.
- The article confused company relationships and misled the public.
- Plaintiffs spent time and resources clarifying misinformation, disrupting market competition order.
The court concluded the conduct constituted unfair competition under Article 2.
2. Liability
- The court rejected the defense that AI authorship shields the user from liability.
- AI is an assistive tool, and hallucinations cannot be fully avoided.
- The user exercises greatest control over dissemination; therefore, they bear a reasonable duty of care: review, filter, verify, or label conspicuously.
Because the defendant failed these obligations, he was held liable.
V. Judgment
The court ordered the defendant to:
- Publish a written statement for three consecutive days to eliminate adverse effects; and
- Pay RMB 30,000 in damages and reasonable enforcement costs.
Court:
Hangzhou Binjiang District People’s Court
Final Decision Date:
December 3, 2025
Case No.:
(2024)浙0108民初10311号
(2024) Zhe 0108 Min Chu No. 10311
