[UPDATE: I wrote the below before seeing an update on Danwei noting that the fine was canceled. This only underlines the power of online controversy, especially considering that the cancelation notice says the man was still guilty: they are merely using discretion in this case.]
Police officers who said they were investigating the distribution of "harmful information" from a new business' IP address found a 30-minute adult video on a hard drive and fined the owner 1,900 RMB ($277 USD), according to a reported translated by ESWN.
The crux of the legal claim appears to be the distribution function of BitTorrent, which was how the man accused, Ren Chaoqi, said he obtained the video.
The fine, no small amount for a newlywed with a new small business like Ren Chaoqi, has apparently ignited a controversy on some Chinese-language websites.
According to the article, online opinion is firmly on Ren's side:
According to an Internet survey conducted by Sina.com: 55,259 persons voted and 96.52 (53,251 persons) thought that "this person did not illegal distribute and exhibit pornographic videos and that the negligible impact should not have incurred such as heavy fine." At the Nanyang bar at Baidu, a similar survey showed that 99% were bothered by the police action.
The report isn't clear on what law was used to fine Ren. At first it was under a law designed to punish someone for obtaining illegal revenue. Ren, however, told media that the video was purely for personal viewing.
Later, the citation said the offense was copying illegal material. This is where BitTorrent comes in. Indeed, unless settings are specifcally set up for someone to be a "leech" only, downloading from BitTorrent also includes transmitting.
Ren told a reporter he is waiting for an administrative review that he hopes will lead to a lower fine--or no fine at all.
This curious case, while quirky, exposes interesting workings of internet society, passing of information, and China's legal system. Check out the full article.