Baidu is latest to be sued under Anti-monopoly Law
May 09, 2009 | BY
clpstaff &clp articlesCase is similar to recent complaint against Google in US
Following recent action taken against China Mobile, a lawsuit has been filed against Baidu on the grounds of abuse of dominant position.
The litigation was filed with Beijing No. 1 Intermediate People's Court by Tangshan Renren Information Service Company (TRISC). According to the China Daily, the company said Baidu had “monopolised the Chinese search engine market” and alleged the search engine had “blacklisted” a subsidiary after it moved to a lower-tier advertising arrangement.
In this case, Baidu has refuted the allegations, and the existence of the search engine market itself – online searches are generally free and so no pricing scheme exists, the company said.
But the practice of search engine providers charging advertisers for higher search result rankings has led to competition law and other related claims in several countries: Google was sued in New York on similar grounds in February this year.
“It is not entirely surprising Baidu is being targeted now in China,” said Gerry O'Brien, JSM senior associate.
But the case again highlights the lack of action by the State Administration of Industry and Commerce (SAIC), one of the state anti-monopoly enforcement agencies responsible for examining alleged abuses of dominant position. O'Brien told China Law & Practice that TRISC's parent company had tried complaining about Baidu's practice to the SAIC.
“But SAIC appears to be wholly focussed on finalising its procedures and guidance documents in relation to the Anti-monopoly Law at this stage – rather than conducting investigation and enforcement activities,” O'Brien said.
The courts have so far been slow to deal with abuse of dominance claims based on the Anti-monopoly Law, mainly because no implementation rules or guidance documents have yet appeared on this subject.
“It will be interesting to see if the courts are willing to adopt and run with their own interpretation of the prohibition,” said O'Brien.
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