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China Launches Three-Month Crackdown on False Auto Marketing

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China’s industry ministry announced Wednesday a three-month campaign targeting false marketing and online misconduct in the automotive sector. The move comes as regulators tighten oversight following a prolonged price war that has strained carmakers, suppliers, and dealers in the world’s largest auto market.

Key Measures

  • False & Misleading Marketing: Authorities will curb exaggerated or deceptive claims about vehicles.

  • Troll Manipulation: Campaign will target organized online efforts to smear rivals for profit.

  • Automaker & Platform Oversight: Companies and digital platforms must implement corrective measures to ensure compliance.

Industry Context

  • Price War Fallout: Beijing tightened rules in May to limit aggressive discounting, which has disrupted margins across the auto supply chain.

  • EV Slowdown: Electric and hybrid vehicle sales grew at the slowest pace in 18 months last month, highlighting the risks of oversaturation and competition.

  • Regulatory Focus: The ministry emphasized curbing “negative topics” spread online with profit motives, signaling tougher scrutiny of both automakers and digital ecosystems.

Implications

This campaign is expected to reshape auto sector marketing practices in China, with regulators seeking to stabilize competition, protect consumers, and prevent reputational manipulation in the rapidly evolving EV market.

Zalando Challenges EU Tech Regulations, Argues It Shouldn’t Be Classified as a Very Large Online Platform

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Zalando, Europe’s largest online fashion retailer, has criticized EU regulators for classifying it alongside major platforms like Amazon and AliExpress under the bloc’s Digital Services Act (DSA). The company argues that its business model is fundamentally different, and thus it should not be subject to the same stringent provisions that apply to the other two tech giants.

The DSA, which came into force in 2022, imposes more responsibilities on very large online platforms (VLOPs) to combat illegal and harmful content, with fines of up to 6% of their global annual revenue for non-compliance. Zalando’s lawyer, Robert Briske, told the General Court that the European Commission had failed to properly recognize the differences between Zalando and companies like Amazon, AliExpress, and booking.com. He emphasized that Zalando operates a hybrid business model, combining both direct retail and a marketplace for third-party sellers, which sets it apart from purely online shops or marketplaces.

Zalando contends that the Commission’s designation of its active users as 83 million is inaccurate. The company argues that only 30.8 million of those visitors qualify as active users in 2023, the year it was classified as a VLOP. Briske stated that this miscalculation was another key issue in the case.

In response, EU Commission lawyer Liane Wildpanner defended the classification, asserting that Zalando’s model is similar to that of Amazon and AliExpress, both of which also offer hybrid services. Wildpanner argued that Zalando was attempting to “have the best of both worlds” by challenging its VLOP designation.

Zalando has garnered support from Germany’s e-commerce association, BEVH, while the European Information Society Institute, the European Parliament, and the Council of the European Union have sided with the Commission. The General Court is expected to issue its ruling in the coming months. Amazon, too, has challenged the Commission’s VLOP designation and is awaiting a hearing date.

Elon Musk’s X Lawsuit Against Media Matters Advances to Trial After Texas Judge Denies Dismissal Request

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A federal judge in Texas has ruled that Elon Musk’s X, the social media platform formerly known as Twitter, can proceed to trial in its lawsuit against the media watchdog group, Media Matters. U.S. District Judge Reed O’Connor denied a request from Media Matters to dismiss the lawsuit, clearing the way for the case to be heard in court with a trial date set for April 7.

X’s lawsuit stems from a report published by Media Matters in November, which claimed that advertisements from major brands such as Apple, IBM, and Disney were appearing alongside hateful content on the platform. Following the report, several of these companies suspended their advertising campaigns on X, prompting the lawsuit. X’s legal team has accused Media Matters of fabricating the report to mislead advertisers, alleging that the publication had a financial motive in its portrayal of the platform and its content.

X’s attorneys argue that Media Matters’ report was not only misleading but also intentionally deceptive, causing financial harm to the platform by driving away advertisers. They claim the publication was designed to damage X’s reputation and undermine its advertising revenue. As a result, X is seeking damages from Media Matters and two of its staff members, accusing them of contributing to the financial losses incurred by the platform due to the paused advertising campaigns.

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Media Matters, however, has dismissed the lawsuit as “frivolous.” Angelo Carusone, the president of Media Matters and one of the defendants in the case, stated that the lawsuit was an attempt by Musk to intimidate critics and suppress their freedom of speech. Carusone argued that the legal action was part of a broader effort by X to silence media outlets that scrutinize its practices.

Judge O’Connor’s decision marks a significant victory for X, allowing the platform’s claims to be heard in court. In his ruling, O’Connor stated that X had sufficiently detailed its case, justifying its claims against the media watchdog. This is not the first time O’Connor has been involved in legal disputes surrounding X and its operations. Earlier this year, the judge dismissed a separate attempt by Media Matters to compel Musk to disclose Tesla’s involvement in the case, rejecting the argument that Tesla had a direct financial stake in the outcome.

In another legal matter, O’Connor recently recused himself from an antitrust lawsuit filed by X against a global advertising association and its member companies, including Unilever, Mars, and CVS Health. His recusal followed the disclosure that he held investments in Unilever, which prompted questions of a potential conflict of interest.

As the trial approaches, it will bring further attention to the ongoing legal battles Musk’s platform faces, particularly surrounding its efforts to balance free speech and advertising on its platform.