|Girish Shetti |||Feb 03, 2016 12:58 PM EST|
(Photo : Getty Image) A woman walks past a KFC restaurant in China. KFC has won an important lawsuit case against three Chinese firms.
A Shanghai court on Wednesday fined three local Chinese tech firms for spreading false rumors about KFC fast food chain. The false rumor activities mainly included uploading doctored photos of deformed chickens on social media accounts and using it as propaganda against KFC.
The three accused Chinese tech firms are Yingchenanzhi Success and Culture Communication, Taiyuan Zero Point Technology and Shanxi Weilukuang Technology.
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Yuma Brand - the American company that owns KFC and Pizzahut chains across the world - sued these three tech firms in June 2015.
As per court orders, these tech firms will have to tender an officially apology and pay a combined fine of Rs 600,000 yuan ($91,191) to Yum Brand.
The Xuhui District People's Court on its official microblog account said the three firms had "damaged KFC's reputation" and "caused it economic losses" by permitting the allegations to be posted on their social messaging accounts.
Meanwhile, Yum officials in China welcomed the court's judgment and voiced hope that it will act as deterrence in future against companies using false rumors to undo its business.
Yuma's China spokesperson Cindy Wei in a mail to Reuters said, "We brought suit against these individuals for making false statements about the quality of our food and we are pleased with the outcome."
Yuma brands business in China, which is the company's second largest market, has been struggling in recent years. The company's profit has been under serious stress since the end of 2012.
While conventional business problems have been held responsible, many experts also label 'regular occurrence of food scandals over recent years' as main reason for Yum's falling business in China.
This judgment, however, has come as a shot in the arms of Yum Brand, as the company is desperately looking to revive its fortunes in the all important Chinese market by year end.
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