Two network companies were charged at Beijing Chaoyang District People's Court on Friday with smearing a woman's reputation by spreading rumors on the Internet.
Judicial experts suggested Web portals verify information before they put it online to reduce infringements.
The woman, surnamed Zhang, an official at China Petrochemical Corp, also known as Sinopec Group, was allegedly targeted early this year by Fu Xuesheng in a rumor that she had received sex bribes from a construction company that later won a bid from Sinopec.
The two portals carried the rumor, which was forwarded online more than 110,000 times within three days.
Shanghai police detained Fu in August, who admitted that he faked the news in retaliation after his company failed to win the bid.
Zhang sued the two network companies — itxinwen.com and china.com — claiming they are also responsible for damaging her reputation.
Zhang was absent at the court hearing.
Zhu Wei, Zhang's lawyer, said his client's work and daily life has been disrupted by the rumor and asked the two companies to pay her 100,000 yuan (S$20800) in compensation.
"The rumor harmed the woman as well as her parents badly," Zhu said.
"The two companies forwarded the rumor without verifying it and used eye-catching pictures to attract netizens," he added.
However, Yao Kefeng, the attorney for itxinwen.com, rejected the claim, saying the Web companies, as online platforms, are not legally bound to check the authenticity of information.
"What a network company should do is to verify whether information on its website is violent, obscene or harmful to the national interest. We are not able to verify all information," he said.
The court has not yet issued its verdict, but the case has already attracted the attention of many legal experts.
Liu Deliang, a law professor at Beijing Normal University, said similar cases are common nowadays.
"The network companies should technically prevent rumormongers using the Internet to spread harmful information, by limiting users' access. That can be an effective way to crack down on online rumors," he said.
Shen Yang, a professor at the School of Computer Science and Information Management at Wuhan University, said Internet users should think twice before they forward information from vague sources.
But Yu Guofu, a Beijing lawyer specializing in online rights infringement cases, said verification cannot limit Web companies' normal operations.
"After all, these companies need to make profits, and excessive intervention in their operations will harm their development," he added.