Background

Beijing’s First Intermediate Court handed down its judgement in the Tanghsan Renren v Baidu case on 18 December 2009 which concerned claims that the leading Chinese search engine, Baidu, had abused its dominant position in the market for online search services. The claims were made by Renren, a pharmaceutical company which was concerned that its website appeared lower in search result listings when it decided to reduce the amount it spent on Baidu’s paid-for listings. Renren sought compensatory damages of RMB 1.1 million.

Antitrust issues

A plaintiff is required to show that the defendant held a dominant position in the market and the market data it puts forward must be substantiated. In this case, Renren failed to meet either requirement and was merely relying on two press articles referring to Baidu’s alleged dominance without providing any real data.

The Court also rejected Renren’s explanation for the low ranking of its website in the list of search results, on the basis that the practice was non-discriminatory, transparent and that there may have been junk links on Renren’s website. Thus Baidu could be justified in lowering the ranking of Renren’s website in order to provide its search engine users with reliable and relevant results.

Precedent

This is the first Beijing court ruling in a dominance case under the Antimonopoly Law and is considered by commentators as demonstrating a confident application of the law on the part of the judiciary given the detailed judgement handed down.