A Chinese court has declined to rule that Chinese internet search engine provider, Baidu Inc. (Baidu) abused its dominance, in a private action instigated by Tangshan Renren Information Service Company (TRISC). The case was brought under Article 50 of China’s Anti Monopoly Law (AML). TRISC alleged that Baidu had, without justification, altered its search ranking so that TRISC’s website received significantly less hits. Baidu admitted making the change but argued that its actions were justified and in accordance with its listing policy.

The court held that, in the absence of economic analysis or justification of the market figures provided by TRISC in support of its claim, it could not conclude that Baidu held a dominant position in the relevant market (China’s search engine market). The court was satisfied that Baidu’s action was justified, taking into consideration that:

  1. TRISC’s website contained a large number of ‘junk links’ which artificially inflated their search ranking
  2. Baidu had acted in accordance with its listing policy which was available on Baidu’s website and had been brought to TRISC’s attention, and
  3. Baidu had not discriminated against TRISC as Baidu’s enforcement policy applied equally to all websites.

This decision provides important insight to the way Chinese courts interpret the still relatively new AML. Corporations doing business in China can take comfort from this decision as it suggests that Chinese courts will be open to considering any practical business justifications offered for allegedly abusive conduct.