Police in Beijing have arrested two men for allegedly fabricating online rumors and defaming others, and vowed to further investigate the "opinion leaders" who helped them spread the rumors.

The arrests came amid a series of actions taken by the authorities to regulate online conduct, and represent a demonstration of the authorities' resolve to deal with online rumors, but have also raised concerns over free speech in cyberspace.

Yang Xiuyu, the founder of the Erma Company, who goes by the alias of Lierchaisi on Sina Weibo, and Erma employee Qin Zhihui, who uses the screen name Qin Huohuo, were found to have created and spread online rumors and profited from their illegal actions, Xinhua quoted Beijing police as saying. Another two employees of the company have also been detained as part of the probe.

The two men were detained after police received accusations they had "provoked trouble" and engaged in illegal business operations. Police received the accusations after the pair had made claims that legendary good Samaritan soldier Lei Feng had led a lavish life.

According to the police, the two conspired to fabricate rumors to gain followers on Weibo. Among the many rumors they started was an accusation that the government had granted 200 million yuan ($32.7 million) in compensation to a foreign passenger who died in a train accident in 2011. The rumor was widely spread and triggered huge public anger as the alleged compensation was much higher than a Chinese victim could have received.

Both Qin and Yang have confessed the crimes to police and admitted they had said Net users should be manipulated into believing that they are the "victims of social injustice" and only "anti-social activities could help them vent their dissatisfaction," Xinhua reported.

Luo Yuan, a major general of the People's Liberation Army who is famous for patriotic remarks, was one of the victims of the rumors. The pair claimed Luo was a deserter during a war, and that Luo's family members are living in the US.

Luo told the Global Times that the arrests were encouraging, and called on the public to jointly safeguard a "healthy and orderly" online environment and social order.

Meanwhile, the Beijing Daily Wednesday cited an unidentified Beijing police officer as saying that Qin confessed to making deals with certain Internet celebrities to forward his posts in an effort to magnify the social influence, and the police would investigate any celebrities involved in the case.

"Some of the online celebrities and opinion leaders are biased. They only spread rumors, and never dispel rumors, making it much harder to clear my name," Luo complained.

"If the online celebrities are found to have engaged in this while aware that the information was just a rumor, they should take legal responsibility. But if they aren't, they might walk away from the charge," Wang Sixin, a vice dean of the School of Political Science and Law at the Communication University of China, told the Global Times.

The authorities have recently intensified efforts to foster a positive online environment, with an emphasis on the conduct of "opinion leaders" online.

Lu Wei, director of the State Internet Information Office, said in an Internet conference earlier this month that spreading the truth is one of the "baselines" for Internet celebrities.

The crackdown on online rumors also brought some concern over the potential impacts on freedom of speech.

"This is indeed a tricky problem. On the one hand, this kind of move will encourage punishments for those who fabricate rumors, stopping more people from doing this; on the other hand, this might hurt freedom of speech if it is not handled properly," Wang said.

An opinion piece carried by Xinhua sought to dispel doubts. "China is a country that respects and protects free speech, but people should also bear in mind that greater online freedom is guaranteed by greater responsibility," it said.