Brian Hioeby Brian Hioe
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Photo Credit: iQiyi/Logo
LEGAL CONTENTION continues over Chinese streaming provider iQiyi, with the Taiwan High Court ruling against a lower court earlier this week to find three Taiwanese citizens guilty of violating the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area.
The three individuals, Fan Li-ta, Chao Shan-chen, and Yang Ming are accused of violating laws that require Chinese companies from doing business in Taiwan unless approved by the competent authority, in skirting around Taiwanese authorities. The three are accused of operating iQiyi’s Taiwan operations at the behest of the Chinese company’s central headquarters in Beijing, rather than simply as licensed distributors as they claim.
Beijing’s iQiyi headquarters transferred funds to the company set up by the trio, OTT Entertainment Limited, through its Hong Kong subsidiary. Apart from this fact, OTT Entertainment Limited is accused of taking orders and direction from IQiyi. Fan served as chair of OTT Entertainment Limited, Chao as financial director, and Yang Ming as vice president.
The sentences for the trio are relatively light, in that Fan and Yang will face five months in prison, while Chao will serve three months in prison. The salaries that the trio gained from iQiyi, of around 40 million NT, will not be confiscated in that this is not viewed as the proceeds of a crime. This occurs despite that the original case in 2022 argued that the 40 million NT was indeed the proceeds of a crime and the prosecutor recommended that the amount be confiscated during this ruling as well.
The trio have claimed that the ruling is politically motivated and that they will fight it. Fan, a media personality, criticized that the sentences for all of the involved individuals are for less than one year, but more than thirty investigators in four groups were mobilized as part of the investigation to search the homes of the involved individuals. Fan has stressed that he visited relevant authorities such as the National Communications Commission, Ministry of Culture, and Ministry of Economic Affairs, but claims that iQiyi was targeted because it is politically inconvenient for the DPP administration.
The iQiyi Innovation Building in Beijing, where iQiyi is headquartered. Photo credit: Ashtang775/WikiCommons/CC BY-SA 4.0
The ruling is of the second instance and can be appealed. It overturns a previous ruling by the Shilin District Court.
In 2020, the Taiwanese government deemed Chinese OTT providers illegal, and then moved to ban Taiwanese individuals or companies from acting as intermediaries for Chinese OTT providers.
That being said, the Taiwanese government did not move to ban the use of Chinese OTT providers, seeing as such OTT providers operate through servers in Hong Kong, and removing them entirely from the Internet would raise questions regarding limitations on freedoms of speech. To this extent, one notes that Taiwanese OTT providers are not allowed to operate in China, either.
Part of the concern regarding Chinese OTT providers stems from the fact that they were excluded from regulations governing television and radio, leading to calls from domestic media platforms that OTT providers should face the same regulations that they do. This is also because of broader restrictions regarding Chinese investment in Taiwan, which restrictions on Chinese OTT providers were rolled out alongside.
After broader questions regarding the uniform regulation of television, radio, and streaming, it is feared that Chinese OTT providers could serve as mediums for propagating disinformation in Taiwan. Chinese OTT providers have been known to censor what they considered politically sensitive content in the past, such as abruptly halting the broadcast of television drama Days We Stared at the Sun 2 in 2017 because it is set during the 2014 Sunflower Movement.
Still, the issue eventually became a politically charged one between the KMT and DPP, with the KMT framing the DPP’s measures as a measure against media freedoms. This framing by the KMT is not surprising, seeing as it is the pro-unification party in Taiwanese politics.
The KMT leaned into such attacks after pan-Blue CtiTV lost its broadcast license over its reporting in the 2020 election cycle. Though CtiTV was reported as accepting Chinese funding and direction from China’s Taiwan Affairs Office by the Financial Times and Apple Daily, the National Communications Commission used other justifications for stripping CtiTV of its broadcast license, so as to avoid the perception that it targeted CtiTV over political reasons. This did not prevent such criticisms of the KMT, which has increasingly alleged that the Tsai administration seeks to take action against media outlets whose reporting is disfavorable to it–even ones with links to China. So, too, with political contention over Chinese streaming platforms in Taiwan.