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Baidu biz model faces legal challenges

By Wang Xing (China Daily)
Updated: 2008-12-02 09:36

Chinese Internet company Baidu Inc may have to face a legal dispute by the end of this month.

Li Changqing, a lawyer from George Wu & Partners Law Firm, said he will launch an anti-monopoly lawsuit against the country's largest search engine by the end of December.

He said Baidu, which holds about 70 percent of China's search engine market, has abusively used its dominant position by blocking websites that refused to pay for listings in its search results.

"We are not against Baidu's current business model or its dominant position," said Li. "We are against its act to use the position to kick out other websites."

Li filed the first complaint under China's new anti-monopoly law against Baidu in October. He was reported to have led a group seeking a mass complaint against Baidu's business practices, which would be filed once the group manages to enlist 100 companies willing to sue Baidu.

But Li said he will launch the lawsuit on behalf of a Chinese medical website blocked by Baidu this month .

Baidu has been trapped in a business scandal since two weeks ago after China Central Television reported that the company gave top listings to unlicensed medical websites and blocked websites that refused to pay for listings.

The company has promised an overhaul of its business operation and planned to release a new advertising platform that would mark sponsored search results more clearly.

Baidu denied blocking websites that refuse to pay for the bidding. The company did not respond to requests for comment yesterday.