Internet users who spread malicious rumours could face fines up to 5,000 yuan (US$625) in Southwest China, under a series of new regulations passed in Chongqing Municipality.
New regulations on the protection of computer information have recently been ratified by the Standing Committee of the Chongqing People's Congress, the local legislature.
According to the regulations, people who post defamatory comments or remarks, launch personal attacks or seek to damage reputations on-line, will receive a warning or be fined between 1,000 and 5,000 yuan (US$125 to US$625).
Organizations involved in distributing defamatory material will be fined between 3,000 and 15,000 yuan (US$375 to US$1,875).
Those whose rumours cause serious consequences could be detained for five days or even more.
The act follows a State Administration of Radio, Film and Television announcement on the regulation of online "egao," a slang term for the spreading of remarks or film clips which satirize others.
The legislation had a warm response yesterday, with people saying it could lead to a cleaner online environment.
"As many netizens hide behind a virtual identity, they can forget legal boundaries and attack people irresponsibly. That has harmed social order and personal reputations," said Dong Ping, a college student in Chongqing.
Despite the tough fines for spreading rumours, the legislation doesn't go as far as initially planned, with legislators leaving out a possible requirement for private Internet users to register with the Public Security Bureau after a public outcry against the proposal.
The legislation does however require computer information systems and institutions that have access to the Internet to register with the police if they have an Internet connection.
The regulations also set out penalties for producing, inputting, and spreading viruses or other harmful data online.