BEIJING - China will regulate the thriving online group buying market to protect customer interests and boost the sector's sound development, according to a circular issued on Wednesday.

The State Administration of Industry and Commerce (SAIC) said in the posting on its website that problems like deceiving customers, selling fake products and artificially raising original prices are arising frequently as the industry becomes popular in China.

"Disputes and complaints related to online group buying have seen a sharp rise," the administration noted.

The SAIC urged local authorities to examine the qualification of online group buying providers and supervise them to fulfill their liabilities.

Local authorities should also intensify their work to crack down on illegal activities by service providers, it said.

According to a report released earlier this month by China E-Commerce Research Center, a total of 203 million people participated in online group buying in China in 2011, up 28.5 percent from a year earlier.

However, complaints about the industry accounted for 25 percent of all e-commerce complaints in 2011, according to another report released Wednesday by the same research institution.