Baidu to cease listing unlicensed drug distributors in search results

Shanghai. November 17. INTERFAX-CHINA - Baidu.com, China's most popular Internet search engine, has stopped listing in its search results pharmaceutical companies that lack the necessary licenses to market drugs, domestic media reported on Nov. 17.

Since the beginning of this month, Baidu has required pharmaceutical companies seeking search listing to provide a valid State Food and Drug Administration (SFDA) drug retail license, or Good Supply Practice (GSP) certificate, Baidu's advertising sales service center told Interfax.

In addition to asking for evidence that a company is legally entitled to sell drugs when it applies for a new listing, Baidu also plans to clear all existing information from its site about unlicensed companies by Nov. 18.

Although Baidu has not disclosed the reasons behind the initiative against illicit pharmaceutical advertising, Internet portal Netease reported that the company is responding to a recently program aired on Chinese state media, CCTV.

On Nov. 15 and Nov. 16, a popular Chinese in-depth news program, "News in 30 Minutes", alleged that by showing information for companies without proper SFDA licenses, Baidu is committing fraud.

CCTV reporters searched for medicines on Baidu, and found that the top five results on Baidu's search list for one specific medicine were all for non-licensed pharmaceutical sites, while genuinely licensed pharmaceutical companies were not listed until the second or third page.

Enquiries by another reporter, under the guise of a party interested in listing on Baidu, showed that the company would place higher-paying companies at the top of its search results list and even suggested that Baidu would help the company acquire a fake drug business license.

Baidu differs from most other search engines, such as Google or Yahoo, as it uses a pay-for-ranking model, whereby Web site operators can pay for their Web site to appear higher up in search results pages.

The CCTV report also broadcast complaints by a number of companies against Baidu, which claimed that the search engine actively withheld information about their Web sites if they stopped paying for a listing position.

This is not the first time that Baidu has been implicated in cash-for-search-results allegations. Earlier this month, Baidu was accused by a former employee of promising clients a value-added service under which it will block any unflattering news from its search results.

The company denied the claim, but thousands of Internet users have already said they are switching to using Google China on concerns that Baidu's search results are biased.

Furthermore, Baidu is also facing a lawsuit over unfair search practices. On Nov. 10, Li Changqing, a lawyer from George Wu & Partners Law Firm, said he filed a lawsuit against Baidu on behalf of medical information provider Renren Information Co. Ltd.

The lawsuit was lodged with the Ministry of Commerce (MOFCOM), one of the ministries responsible for overseeing the country's Anti-monopoly Law, and claims that Baidu punitively removed links to several Web sites that had withdrawn from its paid ranking service. The lawsuit seeks RMB 174.4 million ($25.55 million) in compensation for the plaintiff.

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