(ECNS) -- Chinese news aggregator Jinri Toutiao, or "Today's headlines," was found secretly promoting fake advertisements in second and third-tier cities, where market regulation is relatively looser than in Beijing and Shanghai, China Central Television reported.
Toutiao uses algorithms and artificial intelligence to select news and other content for readers, with the bulk of its revenue coming from advertising. According to the news program "Economic Half Hour" aired on CCTV-2 Finance and Economics Channel, Toutiao recommended different news and content depending on a user's geographical location.
A CCTV journalist in Nanning City, Guangxi Zhuang Autonomous Region, received covert medical advertisements on Toutiao that clearly violated Chinese law, including a suspicious drug for diabetes and a fake drug claiming to be from traditional Chinese medicine giant Tongrentang in Beijing, said the report.
Two Toutiao staff members in Nanning revealed that the most common trick is to place a legal advertisement on the app's first screen and, after a click, readers are led to a false advertisement page or WeChat account touting the products.
Toutiao helped unqualified companies cheat the usually strict ad approval process, the report said, and third-party companies were also involved in the swindle.
Toutiao's staff in Chengdu, Sichuan Province, disclosed the same scheme of clicking twice to avoid market regulation.
Yin Wenge, brand manager of Tongrentong's branch in Hinggan League of the Inner Mongolia Autonomous Region, said a Tongrentang capsule to regulate blood-sugar levels had to be pulled from shelves because too many fake products were causing market confusion and lawsuits.
The popular news app was accused of "spreading pornographic and vulgar information" and "causing a negative impact on public opinion online" by Beijing's Internet regulator last December.
