Beijing court rules platforms must explain AI content labeling decisions, citing breach of contract

The Beijing Internet Court recently ruled that a platform breached its contract after automatically flagging and hiding content posted by user Xiao Tang because it determined the text contained unlabeled AI-generated material. Following Xiao Tang's lawsuit after an unsuccessful appeal, the court ordered the platform to reinstate the content and erase related violation records. The case highlighted the platform's obligation to transparency. Judge Gao Ya of the Case Filing Division noted that while the platform used machine identification and manual review to make its determination, it argued it did not need to disclose the mechanism due to trade secrets. However, the court countered that since the platform controlled the algorithmic process, it must reasonably provide evidence or an explanation for its findings, especially for creative text where documenting the creation process is impractical. The ruling established that platforms cannot refuse to explain their algorithmic decisions solely based on proprietary information. Furthermore, the court advised that platforms should implement a tiered handling system, ensuring penalties are proportional to the violation severity, and improve overall content review mechanisms.