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Beijing and Shanghai Investigate Illegal Search Advertising Cases

Shortly after the implementation of the Interim Measures on Administration of Internet Advertising on 1 September, some establishments have already been brought under investigation for non-compliance. The Haidian Branch of Beijing Municipal Administration for Industry and Commerce (BAIC) has initiated investigations against two search engines, Baidu and Sogou, as well as Beijing Baodao Healthcare and two other hospitals named Jingke Gantai and Beijing Longcheng for allegedly releasing illegal advertisements through search engines and other irregular practices.

The new rule has drawn much attention for its requirements targeted at paid search activities. According to the Measures, paid search advertising for promoting sales of commercial products and services is internet advertising in nature and should therefore be explicitly marked as “advertisement”. Prior to the implementation of the new requirements, enforcement officers from the inspection division of BAIC’s Haidian branch have already provided guidance to those internet-based companies located within its jurisdiction, particularly search engines such as Baidu and Sogou, emphasising that paid search results which are “commercial promotion” in nature must be explicitly marked as “advertisement”.

From 1 September onwards, enforcement officers conducted targeted online inspections against some 200 medical establishments through search platforms Baidu and Sogou. Officers said while most of the medical establishments were able to comply strictly with the requirements of the Measures, some still placed ads which contained definitive claims or unverified healthcare-related contents in the ad zones of search engine results. Baodao Healthcare, for example, claimed to have brought in “top” teams from Taiwan; Jingke Gantai said “90% of liver disease sufferers come to the hospital for medical advice”; Longcheng claimed it was “the best obstetrics hospital in Haidian, Beijing”.

Search engine giants Baidu and Sogou have allegedly failed to perform due diligence checks before displaying such ads, while the three aforementioned hospitals might have placed ads in breach of the law, according to the enforcement officers. The inspection division of BAIC’s Haidian branch has already collected relevant evidence and initiated investigations against parties concerned.

Reportedly, Baidu, Sogou and three hospitals in Shanghai are also being investigated by local authorities for the same reasons. Enforcement officers from the Shanghai Municipal Administration for Industry and Commerce conducted searches through Baidu and Sogou and found that Shanghai Nanpu Gynecology Hospital and two others named Shanghai Anping and Shanghai Xupu (a traditional Chinese medicine hospital) which do not possess the technical qualifications for mother-and-child healthcare services, have been placing medical ads of such services through these search engines. The Shanghai authorities have initiated investigations against Baidu and Sogou for allegedly displaying unscrutinised ads, and the aforementioned hospitals for allegedly placing ads in breach of the law.

For Interim Measures on Administration of Internet Advertising in Chinese, please see:

http://www.saic.gov.cn/zwgk/zyfb/zjwj/xxzx/201607/t20160727_170079.html

Content provided by Picture: HKTDC Research
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