How Can Game Companies Protect Their Rights When Facing Fake Traffic in User Acquisition Campaigns? (Part 1)

Since the emergence of the game user acquisition industry, the issue of “fake traffic manipulation” has persistently plagued the operations of game companies' user acquisition efforts. For game companies, fraudulent traffic manipulation by promoters poses the following risks:

First, such practices violate app store operating rules. If an app is detected engaging in abnormal traffic manipulation, it will face penalties like being removed from charts, rendering the promotional costs incurred by the game company futile.

Second, fake traffic generates large numbers of non-retentive, inauthentic users. This makes it difficult for game companies to obtain genuine user feedback and data, hindering their ability to accurately optimize or improve the game later on.

Third, fake traffic often comes with inflated billing data, forcing game companies to pay unnecessary service fees.

Fourth, fraudulent traffic manipulation may suppress exposure for genuinely high-quality games, undermining fair competition within the gaming industry and hindering its long-term development.

Therefore, game companies must remain vigilant against fraudulent traffic manipulation during paid promotion campaigns. This article analyzes the challenges game companies face in seeking redress when encountering fraudulent traffic manipulation, using specific case studies.

PART 1

Invalid Traffic-Boosting Contracts: No Compensation Claimable After Game Being “Cleared from Charts”

When promotion service providers offer traffic-boosting services to apps to artificially inflate their rankings, such actions may be deemed unfair competition practices that interfere with users' autonomy and right to informed choice while undermining fair market competition. According to Article 153 of the Civil Code and Article 17 of the General Principles of Contract Law Interpretation, civil legal acts violating public order and good morals are invalid. Contracts that undermine social stability, fair competition, or public interests—thus violating public order—constitute contracts against public order and morals. Consequently, if a game company's promotion service contract with a provider contains terms like “inflating metrics” or “manipulating rankings,” the contract may be deemed void for violating public order and morals.

In China's first case where a “covert traffic boosting” contract was ruled invalid, the Beijing Internet Court not only declared the contract void for violating public order and morals but also issued a separate decision based on the fundamental legal principle that no one may profit from illegal acts. This decision ordered the confiscation of illegal profits obtained by both the plaintiff and defendant during contract execution.

If a game company knowingly engages promotion services that employ fraudulent traffic boosting to artificially elevate its game's rankings in app stores, it may struggle to claim compensation from the service provider when the promoted game is subsequently removed from rankings due to detected abnormal traffic violations.

In Case No. (2022) Hu 02 Min Zhong 9215, a network company, acting as a promotion service provider, utilized its proprietary reward wall software to provide chart manipulation services for a card game developed by a technology company. Subsequently, the game was removed from Apple's charts due to detected dishonest practices, leading the technology company to refuse payment of subsequent promotion fees. The network company consequently sued the technology company in court. Both the first and second instance courts held that the parties' fraudulent ranking manipulation undermined fair market competition. The contract was deemed void for violating public order and good morals. Consequently, the court dismissed the plaintiff's claim for outstanding service fees and rejected the defendant's counterclaim seeking reimbursement of promotion fees and damages.

PART 2

The Risk of Losing a Lawsuit When Unable to Prove Fake Traffic

If a game company discovers during a partnership that a promoter has engaged in fake traffic and charged excessively based on fabricated data, the game company may file a civil lawsuit for breach of contract. However, due to several factors—such as the absence of clear definitions for identifying fraudulent data or data verification standards in promotional service contracts, the lack of authoritative third-party anti-fraud systems or data verification platforms, and the prolonged time elapsed since the fraudulent data occurred—game companies often face significant evidentiary challenges in practice.

In Case No. (2020) Hu 01 Min Zhong 4454, both parties calculated promotional service fees based on CPA (Cost Per Action). The defendant presented evidence of 324 duplicate entries in the promotion data, with 129 identical registration IP addresses, arguing that this batch constituted fraudulent inflated metrics and should be excluded from settlement calculations. However, the court ultimately ruled that “the defendant failed to provide conclusive evidence proving the 129 duplicate IP addresses represented repeated installations of the same product on the same mobile terminal device as stipulated in the contract,” thus declining to exclude the data.

In (2019) Jing 03 Min Zhong No. 8951, when determining the issue of fraudulent inflated metrics, although PaiRui Company and Vipshop Company submitted an explanation of their anti-fraud system to prove that Aipu Company engaged in fraudulent order-padding during the promotion process. However, since Aipu Company disputed the authenticity of this explanation, the anti-fraud system was independently developed by Vipshop Company, the criteria for identifying fraudulent traffic were unilaterally established by Vipshop Company, and the explanation was provided only one and a half years after the settlement date, the court ultimately concluded that this explanation alone was insufficient to prove Aipu Company's involvement in fraudulent traffic generation.

PART 3

Difficulty in Determining Damages

After reviewing false traffic cases over the past five years, the author observed that civil disputes between advertisers and promoters often arise when promoters file lawsuits after unsuccessful demands for payment of promotion fees. During litigation, advertisers may either raise defenses alleging false traffic practices to refuse payment of outstanding promotion fees or file counterclaims demanding refunds for falsely inflated advertising costs plus liquidated damages.

However, if the contract between the advertiser and the promotion service provider lacks explicit stipulations on data verification standards and the calculation method for liquidated damages, assessing the losses incurred by the game company due to fake traffic and determining the amount of damages becomes challenging.

PART 3

Final Thoughts

Given the negative stance of both legislation and judicial practice toward fraudulent activities like “inflating metrics” and “chart manipulation,” game companies must ensure they do not actively participate in such practices. This prevents the awkward situation of spending money on promotions only to have rankings “cleared” without recourse. If a promotion service provider engages in fraudulent traffic manipulation without the game company's knowledge, the company should implement comprehensive risk control measures throughout the entire process—before, during, and after—to minimize losses and protect its legitimate rights and interests. Specific countermeasures will be elaborated in the next installment.