CNKI fined 50 million yuan over mishandling of personal information

Less than ten months after CNKI was fined 87.6 million yuan for suspected monopolistic behavior, CNKI has been fined 50 million yuan by China’s cybersecurity watchdog.

On September 6, the Cyberspace Administration of China (CAC) issued a document saying that because of illegal activities such as collecting personal information in violation of necessary principles, collecting personal information without consent, failing to disclose or express the rules of collection and use, failing to provide account cancellation functions, and failing to delete users’ personal information in a timely manner after users cancel their accounts, the CAC has ordered CNKI to stop illegal harvesting of user information, and fined CNKI 50 million yuan.

The investigation revealed that there are three companies that primarily control CNKI: Tongfang Knowledge Network (Beijing) Technology Co (hereinafter referred to as “CNKI Beijing”), Tongfang Knowledge Network Digital Publishing Technology Co (hereinafter referred to as “CNKI Digital Publishing”), and China Academic Journals (CD Edition) Electronic Publishing House. Among them, CNKI Beijing and CNKI Digital Publishing are wholly-owned subsidiaries of Tsinghua Tongfang Co. Ltd (also called Tongfang Co. Ltd or Tongfang Joint Stock Corportation).

Tongfang Co. Ltd was established in 1997 by Tsinghua University. Tongfang Co.’s main businesses include nuclear technology applications, smart energy and digital information industries. According to the annual report, Tongfang Co. achieved revenue of 23.761 billion yuan in 2022, down 16.5% year-on-year. Among them, the main business income of the three major sectors of nuclear technology application, smart energy and digital information was 5.11 billion yuan, 5.67 billion yuan and 11.06 billion yuan respectively. Thus, digital information business (e.g., CNKI) is the most profitable business of Tongfang Co. The main business income of the two companies of CNKI Beijing and CNKI Digital Publishing in 2022 is 1.25 billion yuan and 464 million yuan respectively, and the gross profit margin is 43.83% and 40.31% respectively.

The investigation revealed that these companies operated 14 apps that were found to be used for illegal activities such as collecting personal information in violation of necessary principles or without consent, and failing to publicly disclose or clearly state collection and usage rules, the CAC said. The apps were also not providing an account cancellation function, or not promptly deleting user personal information after account cancellation.

It’s not the first time CNKI found itself in trouble.

CNKI (China National Knowledge Infrastructure; Chinese: 中国知网) is a private-owned publishing company in China since 2014. CNKI is a Chinese knowledge infrastructure project initiated by Tsinghua University and Tsinghua Tongfang (Tongfang Co. Ltd). Founded in the late 1990s, CNKI is a network publishing platform that indexes scientific journals, magazines, doctoral theses, master theses, conference papers, newspapers and overseas literature resources. CNKI enjoys almost absolute monopoly in this industry within China. CNKI hosts the largest database of Chinese scientific literature and is frequently used by teachers and students from Chinese universities. CNKI maintains high annual database subscription fees due to its de facto monopoly status on journal search and collection in China.

On April 17, 2022, the Chinese Academy of Sciences announced that it has ceased using CNKI because of its high fees. It was reported that the renewal fee of CNKI database has exponentially increased over the years, and reached millions of yuan in 2021. This matter immediately aroused wide attention from all circles, and the public gradually realized that universities and scientific research institutes, while contributing resources to CNKI, have also been “harvested” by CNKI.

In May 2022, the China’s State Administration for Market Regulation formally investigated the suspected monopolistic behavior of CNKI. On December 26, the Administration announced administrative penalty on CNKI in accordance with the anti-monopoly law. It ordered CNKI to stop illegal activities, and imposed a fine of 5% of its 2021 sales of 1.752 billion yuan, totalling 87.6 million yuan.

In June 2023, the media reported that CNKI was reducing salaries and changing the employee salary structure, and those who disagreed with the changes were dismissed from the employment.

In a statement, Tongfang Co. said that it sincerely accepts the verdict of the CAC and will obey the instructions.