The recent smear campaign involving two mainland dairy giants has put malicious online marketing in the spotlight, stirring calls for better regulation to serve as a warning and improve ethics. Inner Mongolian dairy company Mengniu last week apologised for an act of commercial libel by one of its former employees against major competitor Yili, but said it had also been the victim of such smear campaigns launched by Yili. The latter denied it in an interview with the Beijing News, saying Mengniu was trying to 'mislead the public'. Media commentators and internet users believe the public sparring has shed light on the common practice many mainland companies use to belittle their rivals. Instead of having correct information to help them make purchasing choices, the public is witnessing the tactics that are still battering the reputation of the dairy industry, two years after the scandal over milk tainted with the industrial chemical melamine. Online gossip and innuendo, which are widely practised on the mainland in the consumer goods area, are by-products of the widespread use of the internet on the mainland, where 420 million Net users are more reliant on the Web to make purchasing decisions than people in the West, a Chinese consumer report by Roland Berger Strategy Consultants said this year. The strengths of online marketing over more traditional public relations methods are that it is faster, more interactive, can target its consumers more precisely while also reaching a wider audience and is much cheaper. That is why about 90 per cent of existing traditional PR companies and numerous newly established companies use online strategies, according to the China International Public Relations Association (Cipra). A mature business chain of online marketing has formed connecting manufacturers, PR companies, smaller online marketing companies and internet thugs and spammers. Most companies do not think twice about launching attacks when they become aware of a serious weak point in a rival product, but the practice is seen usually in more competitive industries. 'It is seen much less in monopolistic industries,' Yang Fei , vice-director of Communication University of China's Internet Word-of-Mouth Institute, said. But the practice is more than simply a moral issue, because if it is made up solely to undermine a rival, it can lead to a lawsuit, Bruce Tang, an internet analyst, said. 'About three out of 10 marketing cases in the industry of fast-moving consumer goods involve disparaging their rivals,' Tang said. 'But it is often impossible to collect evidence to file a lawsuit against unethical rivals.' Not only might it be difficult to prove in court, but the fact is that hiring spammers to create or lead a trend among consumers and increase sales or paying websites to delete negative posts is not generally regarded as a breach of business ethics. The problem was that mature regulations and laws to deal with the practice had not caught up with the pace of the industry, Tang said. But Yang said it was difficult to launch regulations to reduce malicious online marketing because it was difficult to define it. 'Self-discipline could be realised jointly through companies, industry associations and the media,' he said. Fan Feng , vice-secretary of the interactive marketing commission of the Internet Society of China and founder of the internet news site Sootoo.com, said online marketing on the mainland relied more on self-discipline at this stage. The State Council Information Office said it would push for a system to register online posters and require the use of their real names. 'It would help curb the malicious online marketing,' Fan said. An online PR guideline issued in March by Cipra said companies involved in unethical online smear tactics should be exposed or even expelled from the association, although it has no legal authority to do it. 'In the West, such as the US, online marketing is much better regulated by libel law, so disparaging is much less common,' Tang said.