Breaking Baidu's monopoly would help curb selling of search rankings

People talk in front of a Baidu's company logo at Baidu's headquarters in Beijing, January 16, 2014. [Photo/Agencies]

BAIDU, THE WEB SERVICE COMPANY behind China's leading search engine, is facing a storm of netizen criticism after the death last month of Wei Zexi, a 21-year-old man who was diagnosed with a rare form of cancer. Searching for a hospital that could help him on Baidu, Wei was guided to a hospital in Beijing that reportedly provided him with expensive treatment that it had allegedly misrepresented. It is Baidu's virtual monopoly of online searches that is behind such incidents, says Zhang Zhouxiang with China Daily:

Baidu has long been known to mix paid information among its search results, so as to guide users to the websites of those that pay for it to do so. Some who have paid for such "hits" have been found to be involved in fraud and there have been many victims.

As a business, Baidu has prospered. In 2015, Baidu made a profit of about 33 billion yuan ($5.23 billion), and it is said to now enjoy roughly 80 percent of domestic online search market.

Fundamentally, it is the loopholes in the law that have allowed it to prosper in this way. As yet, there are no legal stipulations regulating search engines that guide users to a particular website for profit, even if the claims or activities of that website subsequently prove fraudulent. And even if someone sues Baidu for violating the law covering business activities, the lawsuit is unlikely to succeed as it is difficult to provide evidence.

And should a lawsuit succeed, the penalties are not harsh enough to deter Baidu from continuing the practice. In 2008, Shanghai-based Dazhong Trackbacks Logistics won its litigation against Baidu, because those searching for the company on Baidu were misled to many fraudulent websites. The court ruled Baidu pay just 50,000 yuan in compensation.

In most instances, even if an enterprise is smart enough to harm consumers' rights "without breaking the law", they will eventually lose the public's trust and consumers will seek an alternative provider of the services or goods they want. However, there are few alternatives to Baidu such is its stranglehold on the market.

More importantly, given its virtual monopoly, Baidu can easily hide information unfavorable to it.

They only way to stop such harmful activities is to break Baidu's search monopoly.