Antitrust Alert

Beijing Court dismisses private antitrust action brought by Tangshan Renren Information Services against Baidu, a leading Chinese search engine. In imposing a high evidential burden for proving dominant market position, the decision sheds some light on how Chinese courts may define a relevant market and brings to an end a busy year for Chinese antitrust developments.

Background
On December 23 2009 Beijing’s No.1 Intermediate People’s Court cleared internet search engine provider, Baidu Inc (“Baidu”), of an abuse of dominance by dismissing the latest private antitrust action brought under Article 50 of China’s Anti Monopoly Law (“AML”) by Tangshan Renren Information Service Company (“Renren”). Renren had claimed that a reduction of visits to its medical information website was caused by Baidu blocking its website from search results. According to Renren’s figures, visits to the website had decreased dramatically from 2961 individual hits to only 701 individual hits in one day. Renren alleged that Baidu had blocked its website from search results as a result of Renren reducing the amount of money it paid to Baidu for advertised services and, in turn, this amounted to an abuse of Baidu’s dominant position in the Internet search engine market under Article 17 of the AML. Renren sought damages amounting to RMB1.1million and an injunction banning Baidu from blocking its website in the future.

Baidu admitted that it had blocked Renren’s website, but argued that (i) it did not have a dominant position on China’s search engine market; (ii) its search engine service is free to the public and therefore should be exempted from the application of the AML; and (iii) the actions it took in blocking Renren’s website were justified under its published policy as the website contained a deliberately large number of “junk links”.

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