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Baidu.com Accused of Monopolization

Tue. November 11, 2008; Posted: 04:35 AM
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BEIJING, Nov 11, 2008 (SinoCast China IT Watch via COMTEX) -- BIDU | Quote | Chart | News | PowerRating -- Baidu.com, Inc. (NASDAQ: BIDU and FRA:B1C), the biggest Chinese-langue online search engine, became the first appellee in the name of monopoly in the Chinese Internet market, according to an official with China's State Administration of Industry of Commerce.

On October 31, 2008, the official received an 91-page application letter from a Hebei-based company named Renren Information Service Co., Ltd., who accused Baidu of abusing its dominance in the Chinese-language search engine market.

At the beginning of 2007, the Hebei company established qmyyw.com (now qmyy.com), a website engaged in offering of medicine information and online medicine marketplaces.

As an effort to promote the brand of the website, the company came into a deal with Baidu.com later, agreeing that the search engine would use some methods to place the information of qmyy.com on the prominent positions of the Baid.com web pages when netizens key in words about medicine. And in exchange, Renren Information Service would offer a payment of CNY 0.55 to CNY 3.8 to Baidu.com for every visit achieved by qmyy.com through the search engine.

Agreement was meant to be carried out from March to September 2008. In the earliest several months, the two parties had a honeymoon, during which, a large number of the consumers of qmyy.com were lured through Baidu.com.

From June to August, Renren Information Service modified its payment for the Baidu.com service to the minimum, as qmyy.com was in a round of revision.

On July 5, a qmyy.com executive found that it could only seek out four linkages about the website in Baidu.com when typing in its name, compared to about 80,000 formerly. From July 9 to July 10, the passage view (PV) volume of qmyy.com plummeted from 2,961 IPs to 701 IPs. In the two months ended and beginning July 10, the daily PV volumes were 2,936 IPs and 611 IPs, respectively.

However, on September 25, Wang Guanyu, legal representative of Renren Information Service, sought out 6,690 and 3,000 linkages on Google.cn and cn.yahoo.com, respectively.

Based on the above data, the medicine information provider suspected that Baidu.com purposely shielded its information as an illegal punishment against the termination of their cooperation. And in the application letter, the company appealed that regulators should ban Baidu.com from forcing out other websites depending on its dominance, and impose a fine CNY 174.44 million on it against the illegality.

However, analysts said that by far, China has not enact laws that can be used in cases involving new technologies as this one.

From www.hexun.com, Page 1, Monday, November 10, 2008 info@SinoCast.com

For full details on Baidu Incorporated (BIDU) click here. Baidu Incorporated (BIDU) has Short Term PowerRatings of 5. Details on Baidu Incorporated (BIDU) Short Term PowerRatings is available at This Link.

    


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