Category Archives: Corporation

Apple Intelligence’s Unauthorized Rollout in China: A Technical Accident or a Deliberate Regulatory Game?

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(By You Yunting) In the early morning of March 31, 2026, Apple rolled out Apple Intelligence to some Chinese users whose iPhones had been updated to iOS 26.4, but the rollout was quickly halted. Today, we will examine the potential legal liabilities involved, the likelihood of regulatory penalties, and whether the rollout was merely a technical accident or a deliberate regulatory game.

I. A Three-Hour Unauthorized Rollout of Apple Intelligence in China

In the early morning of March 31, 2026, some users of China-version iPhones running iOS 26.4 discovered that Apple Intelligence had unexpectedly become available on their devices. The “Siri” entry in the Settings menu was renamed as “Apple Intelligence & Siri”. User feedback indicated that models from Baidu’s ERNIE and Alibaba’s Qwen were integrated into Apple Intelligence in China-version iPhones. For visual analysis functions, some users reported that the image recognition technology associated with Google was invoked.

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Does Valve’s Labubu Defense Hold Up?

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(By You Yunting) Previously, I wrote an article titled Should Global Steam in China Be Scrutinized Too Since Valve Loot Boxes Was Sued as Gambling in the U.S.?, commenting on New York State Attorney General’s lawsuit against Valve over its in-game loot box mechanism. Recently, Valve posted a defense on Steam’s official website, arguing that its in-game loot boxes mechanism is like baseball cards, Pokémon, Magic the Gathering, and Labubu. At first glance, this defense seems plausible, but in reality, it contains fundamental flaws and borders on sophistry. Let’s take a closer look.

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How to Protect Your Works When AI Lowers the Barrier to Film Creation to Zero

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(By You Yunting) The recent AI-generated Chinese short drama Huo Qubing has gone viral. Reportedly, the computing production cost was a mere 3,000RMB, yet it racked up massive views. A friend asked me: “Can I charge for this video since it’s entirely generated by AI?” My response: “Certainly, it can be offered for a fee. However, under the Copyright Law, works generated entirely by AI are generally ineligible for copyright protection. If someone else uses this video to charge fees, you may have no legal recourse to stop them.” Therefore, to secure enforceable rights, creators must proactively embed protectable intellectual property (IP) or personality rights into their video as an “IP moat”.

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Does Sharing a ChatGPT Conversation Link Mean Waiving Your Privacy?

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Does Sharing a ChatGPT Conversation Link Mean Waiving Your Privacy?

(By Wang Ting) In late July 2025, the “Share” feature of OpenAI’s ChatGPT triggered a global privacy controversy. Conversation links generated by users were indexed by search engines such as Google, leading to the large-scale exposure of sensitive information, including medical records and trade secrets. Although ChatGPT promptly removed the option that allowed shared conversations to be publicly searchable, debate has continued over whether clicking “Share” should be deemed a voluntary waiver of privacy.

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Should Global Steam in China Be Scrutinized Too Since Valve Loot Boxes Was Sued as Gambling in the U.S.?

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(By You Yunting) In February 2026, the New York State Attorney General sued the well-known game developer Valve Corporation (“Valve”) for illegally promoting gambling through in-game “Loot Box” feature in its video games. In fact, several months before the filing, Valve—likely anticipating regulatory pressure—actively lowered the drop rates for certain rare items in Counter-Strike 2, triggering a flash crash in the global virtual item market and causing heavy losses for speculators. The lawsuit far across the Pacific Ocean has also struck a nerve with China’s gaming community since a large number of Chinese players remain active on Global Steam in China which is on the edge of regulation. Because of the gambling allegations surrounding Valve’s own games, this gray zone now faces unprecedented regulatory risks. We will analyze these legal issues under both U.S. and Chinese legal frameworks.

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How Will NVIDIA’s Purchase of Pirated Content to Train AI Be Characterized Under Chinese Law?

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(By You Yunting) Recently, a lawsuit filed by U.S. copyright holders against NVIDIA for allegedly using pirated materials to train AI models has attracted significant public attention. According to the complaint, in order to quickly obtain more than 500 terabytes of data, NVIDIA proactively contacted the pirate website Anna’s Archive and paid hundreds of thousands of U.S. dollars to download a large volume of pirated content, including copyrighted books and articles.

Anna’s Archive is one of “shadow libraries” known for their decentralized and anonymous nature, most of which typically provide access to literature in a way that infringes upon its copyright. If the plaintiffs’ allegations are true, it will be a serious blemish on the reputation of NVIDIA, the world’s most valuable company, to have paid a pirate website for content and then been sued by copyright holders. However, the unauthorized use of training data can be considered the “original sin” of nearly all general AI companies. In both China and the United States—the two global leaders in AI technology, numerous lawsuits concerning AI training data have already emerged. We will discuss whether, under Chinese law, NVIDIA’s alleged conduct will be considered breach of law.

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When AI Becomes Involved in Pornographic Content: Is It Unjust to Convict the Developers?

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(By You Yunting) It has sparked intense debate recently that the developers of Alien Chat AI were sentenced for its chatting with users about pornographic content. Around the same time, Grok, developed by Elon Musk’s xAI, has drawn global criticism for its “one-click undressing” feature. Although these two cases arose in different jurisdictions and were handled differently, they point to the same core issue: AI compliance management. The following will discuss why AI becomes involved in pornographic content and whether punishing the developers is unjust.

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Advantages and Disadvantages of Incentive Shares Held Directly and Indirectly

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(By Bai Lituan) Over recent years increasingly more businesses have used incentive shares to retain key employees. They may hold shares in the subject company directly (hereinafter referred to as “holding shares directly”) or indirectly through a limited partnership i.e., a platform for employees to hold shares (hereinafter referred to as “holding shares indirectly”). What are the advantages and disadvantages of holding shares directly or indirectly? This article deals with this issue in the areas of business control and tax burden.

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Should Shareholders Be Responsible for Illegal Registered Capital Decrease without Notice to Creditors?

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(By Bai Lituan) Registered capital is important part of a company’s assets and a guarantee on civil liabilities owed to people outside the company. Inappropriate registered capital reduction will directly affect a company’s ability to pay its debts and pose a threat to creditors’ interests. Therefore, the creditor notification process is a legal arrangement for maintaining a balance between legal person’s and personal interests and one of the prerequisites for exempting a shareholder reducing their capital contribution from liabilities to the extent of the registered capital decrease.

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Legal Applications of “Clean Hands Rule” to Shareholder Brought Actions

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(By Bai Lituan)

What is “clean hands rule”?

The “clean hands rule” that came from the UK equity law deprives a person acting in an improper way of the right to seek remedies for their acts. A person acting in a way that violates the principles of “justice, conscientiousness, fairness, etc.” in equity law cannot seek remedies in a court under an equity law jurisdiction. The clean hands rule is generally accepted in international business arbitration and reflected by provisions of the Chinese Civil Code. For example, Article 591 provides that if a party violates the contract, the other party should take appropriate action to prevent loss increase or otherwise could not claim for the loss increase. Based on this provision, if a party does nothing to prevent the increase in damages caused by the other party breaching the contract, the non-breaching party will have no right to win the action for the loss increase with its hands not clean. In addition, articles 680 and 1125 of Civil Code implicitly follow the clean hands rule which for example is applied in Chinese cases of buying false products deliberately where the buyer will not be awarded a refund for and damages of three times the price of false products they bought because their hands are not clean and their acts are not protectable by law.

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Six Key Points in Amendments to Company Law for Second Deliberation

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(By Huangfu Yuxuan) On 30 December 2022 the Company Law (Amendments for Second Deliberation) (“Amendments”) was published on the website of Chinese National Congress. The Amendments is to further modify and regulate shareholders’ responsibility to contribute capital, the company’s organizational structure, shareholders’ right to know, directors’ responsibilities, corporate governance of listed companies, company cancellation, etc. to address the problems of existing company laws that do not fit or match the market development. It is the third major amendment of the Company Law since its promulgation in 1993. Key points in the Amendments are as follows.

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Anti-Monopoly Actions Against Facebook and Legal Risks Incurred by Tencent Blocking its Rivals

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The US Federal Trade Commission and others in 48 states and areas in the US filed anti-monopoly actions against Facebook for its acts of blocking access of its rivals’ apps to the application programming interface of its open platform. Actually, such acts are very common and even more serious in China. For example, WeChat developed by Tencent blocked APIs of open platforms of apps and domain names of many of its rivals.

Acts of platform companies blocking others do much damage to orderly competition and could harm or even destroy medium and small size startups. Let’s see what we can learn from the Facebook anti-monopoly action case to prevent monopolies among Chinese platforms.

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An Analysis of the Export Control Law from the Angle of National Security and Interests

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(By Wang Haichua)The Export Control Law adopted by the Standing Committee of the National Congress on 17 October 2020 took effect on 1 December 2020. The aim of this law to accord paramount status to national security and interests was reflected in its official version and the process of its amendment in its formulation procedures. This article is an analysis of this law from the angle of national security and interests.

1.National security and interests up to the highest status

Article 1 of the Export Control Law provides that the aim of making this law is to protect national security and interests, perform the international duty of non-proliferation and strengthen export control. The second draft published in July 2020 changed the order of the phrases “protect national security and interests” and “perform the international duty of non-proliferation” so that the former came before the latter. In contrast with the second draft, in Articles 2, 9 and 10 of the official version the phrase “protect national security and interests” comes before the phrase “perform the international duty of non-proliferation”. The amendments are aimed to align the clauses with Article 1 and reflect the top aim of making the law to protect national security and interests.

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How to Calculate the Time Limit on Liability-Exempt Delay in Construction Work of Builder Units Due to Convid-19

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(By Nie Shengnan)Just before the Chinese Spring Festival 2020, Convid-19 broke out across our country. The government has taken a series of measures to control the spread of the disease, including spring festival holiday extension, increases in the number of inspectors, closure of highways, delay of work and business resumption, quarantine at fixed places and times, etc. These measures are bound to affect the term of work on construction projects. How to calculate the time when the majeure force incident appears and disappears is an issue that the parties involved are very concerned about and is very likely to cause disputes when builder units claim exemption of liabilities based on force majeure clauses.

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Has Luckin Inc. Violated Chinese Criminal Law?

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(By Zhao Sen)There is a widespread concern about the news that Luckin Coffee, a famous Chinese company listed on the US stock market underwent an over 80% slump in share price because of the allegation of financial information falsification. According to documents provided by Luckin Coffee to SEC, Tencent Securities reported, CEO of Luckin Coffee and some of employees who reported to him did improper activities, including false deals since the second quarter of 2019. According to the US Securities Law 1934 and the Sarbanes-Oxley Act, in addition to a large sum of fines, a person who has committed securities related fraud may face an imprisonment of up to 25 years. Is falsification by Luckin Coffee a crime in Chinese law? This is a good question.

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