Wednesday, April 22, 2009

More on the lawsuit

More information is available on the monopoly lawsuit.
Baidu has been accused of abusing its dominant
position online to "punish" a company that cut
back spending on advertising with the Internet search engine. Tangshan Renren Information Service Company (TRISC)
said Baidu had "monopolized the Chinese search engine market",
demanding more than 1.1 million yuan ($160,000) in
compensation after one of its subsidiary websites was blacklisted.
It is believed to be the first case to deal with an alleged breach of
the Anti-Monopoly Law, which came into effect this month. The
suit opened at Beijing No. 1 Intermediate People's Court yesterday
but a verdict was still pending. TRISC claimed reports from
multiple sources prove Baidu has "more than half of total market
share" and said it exercised its power to eradicate the
competitiveness of the plaintiff's website, as well as impair market
dynamics. "After we lowered the amount we paid for Baidu's
advertisement service last May, Baidu punished us and coerced us
to reuse the service by doing so," a spokesman for TRISC told the
court. The number of visits to its website "dropped sharply" on
July 10 from 2,961 to 701. While a search for the company on the
US-based search engine Google found 6,690 pages, Baidu found
only four, he said. The promotion service offered by Baidu charges
enterprises to have their site moved up the results lists following a search.

Baidu refuted the monopoly allegations and said the so-called
"search engine market" does not even exist because there is no
pricing scheme involved in most searching activity. "Searching
services provided by our engine is free to Net users and
enterprises," responded Baidu, adding that a website can easily
exclude itself from being listed in search results by installing a
simple program. Baidu also questioned the figures provided by
TRISC, saying the reported increase in its usage was a "seasonal
phenomenon", and added that, "as a precedent of anti-monopoly
cases in Western courts, companies are normally investigated for
two years". Competition among fast-emerging search engines is
also tight and users easily switch between them, it said. The
Internet firm also said it had blocked the TRISC site because the
firm had cheated and created illegally links to increase hits for its
website. "Search engines are dedicated to providing the best
experience free of charge," it said, adding that it was "normal in
the industry" to crack down on such sites. Baidu ruled out TRISC's
proposal for an out-of-court settlement on condition that the
defendant compensates its "losses".

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