Author(s): Raghu Gopal
Last week, China's Internet regulator announced that search engines that list paid results will need to clearly identify sponsored links and advertisements. They will also be required to verify advertisers' qualifications and specify the ratio of paid results.
Furthermore, search engines operating in the country will be prohibited from providing banned information in various formats including links, summaries, cached pages, associative words, related searches and relevant recommendations. They will also be required to report Web sites and applications that contain prohibited content. These new regulations go into effect on 1 August.
According to stories in China, government officials were spurred into action following the death of a 21-year-old college student suffering from cancer after searching for alternative treatments. A search engine led him to a hospital in Beijing where he received an unapproved treatment for his illness. This was reported to be the ultimate cause of death. Before dying, the young man claimed he had selected the hospital as it came top of his search, which he took as a sign of high relevance and recommendation. It turned out that the link was actually a paid ad, not labelled as such in any way.
After the high-profile death of the student, there was a public outcry against Baidu for failing to distinguish paid from unpaid search ads. Baidu then announced some self-regulation; proclaiming it would restrict the number of sponsored posts to 30 percent of results per page. The company also offered to work closely with government agencies, Internet users and the community to provide objective, and impartial, search results.
Baidu is the dominant search engine in China with close to 80 percent market share. Like Google, the bulk of Baidu's revenues come from advertising, but again like Google, Baidu has been looking for ways to expand beyond search ads.
The new rules will mean search engines operating in China will need to take a greater policing role over their industry. China already has among the most restrictive rules governing Internet use in the world, blocking sites and monitoring Web usage of individuals. Mainstream services such as Facebook, Google and YouTube, are already blocked. The Chinese government points to national security reasons for these restrictions.
There's a consumer-protection aspect to this latest round of regulations. On the surface, this is certainly commendable, but the government's effort is seen as being more intrusive, and a restrictive practice. It will likely continue to keep Western search engines like Google and Bing away from China.