GEO exposed for "poisoning": securities firms and funds are collectively confused—can they still operate? How are the boundaries determined?

“We are currently considering whether to invest in GEO. The 315 exposure has happened, so can we still do it?” a securities asset management professional told reporters. This morning, the company had already communicated with several vendors regarding the legality and compliance of GEO.

GEO, or Generative Engine Optimization, allows AI to quickly extract key information from content and prioritize referencing brand content when generating answers. Reporters learned that many securities firms and fund companies are already experimenting with GEO technology to increase their brand exposure and mention frequency in AI-generated content.

After the 315 Gala exposed “poisonous GEO,” it sparked widespread industry discussion. Is normal GEO placement compliant? How should the boundaries between compliance and violation be defined?

Compliance optimization or “poisonous GEO,” where is the line?

“I personally believe that normal optimization, as long as the content is not illegal, is similar to content marketing,” said a senior manager of a large securities firm’s online finance business.

“If it’s normal GEO placement, it should be similar to the traditional search era, where brands compete for rankings on search results pages through SEO optimization, which is a marketing method,” said the aforementioned asset management professional.

So, how do we distinguish between normal optimization and “poisonous” GEO?

A founder of a GEO vendor told Caixin that he believes the “poisonous GEO” exposed by CCTV involves: first, content generated in bulk by robots; second, the information is fictional; third, dissemination through manipulation of numerous accounts. He considers false information to be the key bottom line for judging compliance.

In his view, legitimate GEO optimization must at least meet four criteria: “content compliance, data compliance, channel compliance, and qualification compliance.”

“If illegal acts such as fabricating and spreading false securities information through AI training or feeding are involved, they are prohibited by law. From a regulatory perspective, the requirements are higher, and the process of discovering violations may be more complex, requiring continuous improvement of regulatory methods,” said Xu Feng, a lawyer at Shanghai Jiucheng Law Firm. He believes regulators have already taken notice, and legislation and regulatory measures will follow quickly.

A legal PR professional pointed out that current GEO chaos mainly involves three aspects: first, commercial promotion without clear labeling of “advertisement” or “promotion,” infringing on consumers’ right to know; second, frequent false advertising, with some GEO service providers fabricating authoritative reports, creating fake expert opinions, and forging user reviews to feed false information to AI, misleading user decisions; third, suspected unfair competition, where some merchants manipulate AI recommendation results through GEO technology, generate大量低质量同质化内容，压低竞争对手曝光率，提升自身品牌排名，破坏公平竞争环境。

The founder of the aforementioned GEO company believes that the root cause of chaos is that after Baidu’s dominant position weakened, many practitioners simply transplanted their original SEO experience into the GEO field, but lacked effective regulation and industry standards in this new track, leading to increasingly aggressive tactics.

He thinks that governing industry chaos depends on the standardized guidance of large model vendors. “Currently, their main focus is on model training. Once they have the capacity to regulate information sources in the future, industry order will gradually establish itself. For example, models in fields like medicine and law do not allow external data scraping, so such chaos is less likely to occur.”

What legal consequences might “poisonous GEO” face?

So, if someone actually operates “poisonous GEO,” what penalties could involved parties face?

The legal PR professional said that companies and PR firms involved in operating “poisonous GEO” could be suspected of false advertising. According to Article 222 of the Criminal Law, advertisers, advertising operators, and publishers who violate national regulations by making false claims about goods or services with serious circumstances can be sentenced to up to two years of fixed-term imprisonment or detention, and may also be fined.

How is “serious circumstances” judged?

According to Article 67 of the Regulations of the Supreme People’s Procuratorate and the Ministry of Public Security on the Standards for Filing and Prosecution of Criminal Cases under Jurisdiction, advertisers, operators, and publishers who violate national regulations and make false claims about goods or services, and meet any of the following conditions, should be prosecuted:

• Illegal gains exceeding 100,000 yuan;

• Making false claims about food or medicine with illegal gains over 30,000 yuan;

• Although not reaching the above amounts, having been fined more than twice within two years for false advertising, and continuing to make false claims;

• Causing serious harm or adverse social impact.

As a new phenomenon, GEO currently has no criminal cases. However, according to news published on the China Court website hosted by the Supreme People’s Court, the People’s Court of Linxiang City, Hunan Province, once sentenced two defendants for misleading consumers with fake positive reviews.

The presiding judge also issued a “reminder”: forging positive reviews to gain false market reputation is essentially covert false advertising, which not only infringes on consumers’ right to know and choose but also damages fair market competition, squeezing out honest businesses. Do not buy or provide services just to boost false credibility.

During the two sessions, Minister of Justice He Rong stated at the third “Minister’s Passage” during the Fourth Session of the 14th National People’s Congress that this year they will further strengthen legal and regulatory provisions in key, emerging, and foreign-related fields, accelerate legislative work on artificial intelligence and low-altitude economy, and better coordinate rule of law with reform, development, and stability. Relevant legislation in the AI field is expected to become more complete and clear.