Baidu faces an investigation and $120 million fine for search results bias

Baidu, the largest search engine in China, may soon face an anti-trust investigation over allegations that it blocked and degraded search query results for a Chinese online encyclopedia website. The complaint was filed by a company that owns the Wikipedia-like site Hudong.com with China's State Administration for Industry and Commerce (SAIC). The complaint requests SAIC to begin an anti-monopoly investigation against Baidu and to fine the search giant 790 million yuan (US$120 million).

Meantime, Hudong does not know if or when an investigation of Baidu will begin. SAIC could not be reached for comment.

The Chinese encyclopedia site started a year before Baidu launched its own online encyclopedia. According to Hudong its articles on popular topics are ranked low in the query results when searched on Baidu. Other search engines such as Google and Microsoft's Bing, however, rank Hudong's articles at the top.

"We believe that Baidu has used its dominant position to bully and block competitors," said Pan Haidong, CEO of Hudong.

Similar accusations against Baidu were put forward by other Chinese websites who alleged that the company has a deliberate search bias, said Mark Natkin, managing director of Beijing-based Marbridge Consulting. "None of the previous accusations of this sort have had any noticeable impact on Baidu," he said.

Responding to accusations Baidu has always been alleging that the company uses a different search algorithm to rank query results than its competitors, Natkin added. "I don't think it will make a difference," he said of Hudong's complaint. "There's been no case in which (Baidu) lost millions of dollars or had to significantly alter its business."