Xiaomi Finance Grapples with Online Fraud and Trademark Infringement in China’s Fintech Sector
A long-running dispute between Xiaomi’s finance vehicle and a company bearing a similar name in Shandong province may have come to an end with a police investigation by local authorities.
For the past four years Xiaomi Finance (小米金融) – the finance vehicle of mobile phone giant Xiaomi, has been in the throes of dispute over commercial trademark usage with Shandong Xiaomi Financial Services Outsourcing Co., Ltd. (山东小米金融服务外包有限公司).
Shandong Xiaomi was first founded over five years ago, and its business scope includes “financial information technology outsourcing, financial operation procedure outsourcing and financial knowledge procedure outsourcing from financial institutions.”
Xiaomi Finance has stated publicly that it is well known that “this Xiaomi (Shandong Xiaomi) is not Xiaomi,” while sources have told Beijing Shangbao that the results of a court hearing are on the verge of release.
As early as December 2018 the Haidian District Court in Beijing ruled that Shandong Xiaomi had committed trade infringement vis-a-vis Xiaomi, and required that it suspend usage of its current company name.
The dispute appears to be ongoing however, with Xiaomi Finance announcing on 6 July via its official Weibo account Shandong Xiaomi had been placed under investigation by police in the Shandong province city of Zibo for illegal acceptance of deposits from the public.
Xiaomi Finance used the occasion to clarify that it had no relationship with Shandong Xiaomi, while also telling Beijing Shangbao that starting from 2020 it had received reports of online fraud involving the use of the terms “Xiaomi Finance” and “Xiaomi Loans,” and had launched an investigation in response.
Xiaomi is far from alone, with other leading fintech companies including Ant Financial, JD.com, Tencent and Lufax all reporting illicit use of their trademarks and names by other parties in China.