In August of this year, the Chinese Communist Party (CCP) undertook a massive crackdown on professional counterfeit regulators across more than 20 provinces, including Heilongjiang, Jiangsu, Tibet, and Xinjiang. A former professional counterfeit regulator, who worked for several years in Shenzhen and spoke under the pseudonym Lin Tao, shared insights into the industry’s inner workings with a media outlet. He indicated that the authorities’ campaign against counterfeit regulators is a guise for protecting local interests under the pretense of combating organized crime.
Lin Tao elaborated that professional counterfeit regulation involves intentionally purchasing goods that contain quality or compliance issues, and subsequently filing lawsuits or reporting to relevant regulatory agencies based on applicable laws. This process allows individuals to collect corresponding compensations as stipulated by the law.
Recent developments have positioned the professional counterfeit regulation sector in the crosshairs of the CCP’s enforcement initiatives. An article published on Sohu on November 7 revealed that in August, multiple provinces in China launched a concentrated effort to arrest professional counterfeit regulators, leading to over a hundred documented detentions, although the true number of individuals arrested nationwide remains undisclosed by the official sources.
By late September through the end of October, several of those detained were released on bail or temporarily freed due to various reasons, such as insufficient evidence, ongoing investigations, or lesser charges.
The widespread crackdown has provoked significant debate. One central issue raised in the aforementioned article questioned whether consumer claims for compensation after acquiring defective goods constitute lawful rights protection or potentially amount to extortion.
Lin Tao pointed out that according to China’s Consumer Protection Law, if a business engages in fraudulent practices regarding products or services, consumers are entitled to request refunds and may also claim compensation of up to three times the purchase amount. Additionally, punitive compensation regulations exist in the food and pharmaceutical sectors, where eligible consumers can legally pursue claims of up to ten times the purchase price.
Delving into the methodologies employed in professional counterfeit regulation, Lin Tao indicated that most cases are handled through official reports and legal actions based on existing laws, rather than through violent or illicit tactics against businesses.
“Currently, the authorities have categorized professional counterfeit regulation as a target in their campaign against mafia-like practices,” he said, suggesting that the government’s actions are primarily aimed at safeguarding local interests.
With a background in this field, Lin Tao had established a company dedicated to counterfeiting regulation, even initiating lawsuits against advertisements featuring celebrity endorsements. Over time, his operations expanded to include legal protections for victims of fraud under the guise of business expansion, mainly targeting brands that allegedly employed fraudulent practices under the pretense of franchising. He described periods of strong business activity where his earnings could reach as high as 300,000 to 400,000 yuan annually.
Sharing some specific nuances of the industry, Lin Tao noted that the scope of counterfeit goods is quite broad, encompassing food products, cosmetics, deceptive advertising, or unauthorized gaming content linked to intellectual property violations.
He explained that products may violate regulations by utilizing outdated standards or failing to meet specified nutritional claims, while internal discrepancies regarding food quality—like excessive additives or illegal substances—can only be confirmed through testing.
“Initially, you could buy testing kits to assess the goods yourself; if suspicions arise, you can forward samples for definite testing. If issues are identified from the tests, you could pursue legal action.”
However, Lin Tao expressed his astonishment at the rapid leaks of whistleblower materials to targeted businesses. He recounted an incident when he reported a well-known book reading application to the Shanghai Complaints Office, only to find that the company was informed of the complaint almost immediately, prompting them to contact him for potential settlement discussions the very next day.
“Even at this high-level complaints agency in Shanghai, whistleblower information is leaked, which raises concerns for whistleblowers in less regulated areas,” he commented.
This situation highlights glaring vulnerabilities in the protection of whistleblower identities, where regulatory agencies may exploit information to tip off the businesses being reported.
“If you report a company and they have connections, even if there’s substantial evidence of a violation, there’s little recourse as local governments tend to shield them,” he argued.
Given this environment, private settlements have emerged as the predominant resolution for many cases. Lin Tao estimated that approximately 70% of the cases he handled concluded through such agreements.
He noted that the compensations received in these settlements often fell dramatically short of legal entitlements, averaging around 30% of what one could expect to claim under formal legal proceedings.
Aside from navigating pressures from local political connections, Lin Tao observed that judicial avenues were increasingly being restricted. “Since 2021, it has become evident that if the quantity purchased is too high, the court might determine that you do not qualify as a consumer, impacting claims for refunds and compensations.”
He remarked that this scenario has severely disrupted the legal reclamation model initially relied upon by professional counterfeit regulators, forcing some cases to pivot towards administrative reporting or negotiations with businesses for settlements.
By 2024, Lin Tao began sensing an escalation in risks associated with his profession. After processing his final batch of cases, he departed China in June of that year, fully ceasing his counterfeit regulatory activities there. “Now, with the authorities categorizing professional counterfeit regulation among their crime-fighting initiatives, engaging in this line of work carries substantial risks,” he concluded.
In August, a prominent figure in the counterfeit regulation sector, known online as “Song Ge Da Hu,” who boasted close to a million followers and had repeatedly exposed instances of food fraud, was classified by the Changchun Public Security Bureau as a member of a “criminal organization,” resulting in the arrest of over twenty individuals within his team.
Recently, the Market Supervision Administration of Fuyang City, Anhui Province, issued a notice categorizing “malicious claims” as a novel subset of organized crime.
In May of this year, the CCP’s Office for Internet Information also announced a crackdown on professional counterfeit regulation, emphasizing four prominent issues, three of which pertained to enterprise-related concerns such as malicious exploitation of corporate information, slander against businesses, and violations of entrepreneurs’ personal rights.
Lin Tao observed that, beyond the deteriorating business environment caused by anti-counterfeit actions, more importantly, these measures serve to protect certain companies and local interests, rather than simply uphold market order.
He indicated that professional counterfeit regulators often intersect with small to medium-sized enterprises, and even some larger businesses, many of which are significant taxpayers. As local governments increasingly depend on corporate tax revenues, the anti-counterfeit efforts could compromise the operational viability of local businesses and, consequently, governmental interests.
While the CCP has intensified its crackdown on professional counterfeit regulation, there has been no corresponding increase in the enforcement against substandard products. Even after Lin Tao’s departure from China, he continues to monitor food safety issues and asserts that problems such as excessive use of food additives, poor quality in cosmetics, and deceptive advertising remain prevalent in the Chinese marketplace.
Reflecting on his years in the professional counterfeit regulation arena, Lin Tao articulated a profound understanding of a shadowy societal underbelly, which included information leaks from regulatory officials, interference from local connections, and a perverse inversion of accountability.
“During this time, I witnessed, and personally experienced, how they could transform black into white. The official representation and their actual attitudes were strikingly divergent,” he remarked.
When asked if he regretted his choice to pursue a career in counterfeit regulation, Lin Tao responded, “No regrets.” However, with the authorities tightening their grip on professional counterfeit regulators, he has since refrained from further engagement in this field.
Lin Tao’s experiences are not isolated; another prominent figure dubbed the “number one counterfeit regulator,” Wang Hai, also opted to leave China. Recently, Wang Hai shared his reasons for departure on an overseas social media platform, spreading an article published by “China Spring.”
The article detailed incidents in Dalian where several cherry growers faced issues with counterfeit pesticides and fertilizers, with Wang Hai aiding these growers in their rights protection efforts. In September, Dalian police arrested multiple farmers, rights protection lawyers, media personnel, and even Wang Hai’s assistant, laboratory head, along with more than twenty employees under allegations of inciting trouble.
Wang Hai suspected that the events were retaliatory actions by corporate interest groups against his rights protection efforts.
He also revealed that in late August, he learned of four private e-commerce companies that pooled a combined capital of one billion yuan to target him and his team, prompting his exit from China.
Political commentator Yue Shan remarked to a media source that when the CCP seeks to suppress particular groups or individuals, the motivations are rarely straightforward. The government’s assault on counterfeit regulators could trigger a chilling effect, deterring genuinely motivated individuals from pursuing actions that protect civil rights.