Counterfeit goods have long caused problems for China’s e-commerce goliaths. Now fake users may be the issue for a local video streaming company, YY Live, according to allegations by short seller Muddy Waters. YY Live is controlled by Nasdaq-listed Joyy. These charges have wider implications.

Questions about tech companies and fake accounts are not exclusive to China. In the US, Facebook’s own estimates suggest duplicate accounts represent about 11% of its monthly active users and fake versions another 5%. When adjusted for those, user number growth is much lower...

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