Beijing Baidu Netcom Science and Technology Co., Ltd. v. Qingdao Aoshang Network Technology Co., Ltd. et al., An Unfair Competition Dispute Guiding Case No. 45 (Discussed and Passed by the Adjudication Committee of the Supreme People’s Court Released on April 15, 2015) CHINA GUIDING CASES PROJECT English Guiding Case (EGC45) November 15, 2015 Edition * * The citation of this translation of the Guiding Case is: 《北京百度网讯科技有限公司诉青岛奥商网络技 术有限公司等不正当竞争纠纷案》 (Beijing Baidu Netcom Science and Technology Co., Ltd. v. Qingdao Aoshang Network Technology Co., Ltd., An Unfair Competition Dispute ), CHINA GUIDING CASES PROJECT , English Guiding Case (EGC45), Nov. 15, 2015 Edition , available at http://cgc.law.stanford.edu/guiding -cases/guiding -case -45. This document was primarily prepared by Jasmine Chen, Jeffrey Chivers, Oma Lee, Jeremy Schlosser, Yifan Yang, and Shiyue Zhang. The document was finalized by Sean Webb, Jordan Corrente Beck, and Dr. Mei Gechlik. Minor editing, such as splitting long paragraphs, adding a few words included in square brackets, and boldfacing the headings to correspond with those boldfaced in the original Chinese version, was done to make the piece more comprehensible to readers. The following text, otherwise, is a direct translation of the original text and reflects the formatting of the Chinese document released by the Supreme People’s Court. The following Guiding Case was discussed and passed by the Adjudication Committee of the Supreme People’s Court of the People’s Republic of China and was released on April 15, 2015, available at http://www.chinacourt.org/article/detail/2015/04/id/1602323.shtml. See also 《最高人民法院关于发布第十批指 导性案例的通知》 (The Supreme People’s Court’s Notice Concerning the Release of the Tenth Batch of Guiding Cases ), Apr. 15, 2015, available at http://www.chinacourt.org/law/detail/2015/04/id/148149.shtml. Copyright 2015 by Stanford University 2 2015.11.15 Edition Keywords Civil Unfair Competition Network Service Principle of Good Faith Main Points of the Adjudication An act by [any] business operator engaged in Internet services that forcibly causes advertisements to pop up on the search results pages of other business operators’ websites violates the principle of good faith and generally recognized business ethics, hinders the proper business operation of other business operators, and adversely affects their legal rights and interests. [Such an act] may, in accordance with the principles [set forth in] Article 2 of the Anti - Unfair Competition Law of the People’s Republic of China , 1 be determined to be unfair competition. Related Legal Rule(s) Article 2 of the Anti -Unfair Competition Law of the People’s Republic of China Basic Facts of the Case Plaintiff Beijing Baidu Netcom Science and Technology Co., Ltd. 2 (北京百度网讯科技 有限公司 ) (hereinafter referred to as “Baidu Company”) claimed: The www.baidu.com website (hereinafter referred to as the “Baidu website” ) that it owned [featured] a Chinese search engine. The three defendants Qingdao Aoshang Network Technology Co., Ltd. 3 (青岛奥商网络技术 有限公司 ) (hereinafter referred to as “Aoshang Network Company”) , the Qingdao Municipality Branch of China United Network Communications Corporation Limited 4 (中国联合网络通信有 1 《中华人民共和国反不正当竞争法》 (Anti -Unfair Competition Law of the People’s Republic of China ), passed and issued on Sept. 2, 1993, effective as of Dec. 1, 1993, available at http://www.npc.gov.cn/wxzl/wxzl/2000 -12/05/content_4600.htm. 2 Translators’ note: the name “ 北京百度网讯科技有限公司 ” is translated here as “Beijing Baidu Netcom Science and Technology Co., Ltd.” in accordance with the name used in an announcement about a patent application filed by the company on December 3, 2011, at http://www.google.com/patents/WO2012126259A1?cl=it:. 3 Translators’ note: the name “ 青岛奥商网络技术有限公司 ” is literally translated here as “Qingdao Aoshang Network Technology Co., Ltd.”. The term “ 奥商 ” is translated here as “Aoshang” in accordance with the translation used on the company’s website, at http://www.og.com.cn/emotionlist.aspx. 4 Translators’ note: the name “ 中国联合网络通信有限公司 ” is translated here as “China United Network Communications Corporation Limited” in accordance with the name used in an announcement made by the company on August 28, 2014 to meet certain legal requirements in Hong Kong, at Copyright 2015 by Stanford University 3 2015.11.15 Edition 限公司青岛市分公司 ) (hereinafter referred to as “Unicom Qingdao Company”), and the Shandong Province Branch of China United Network Communications Corporation Limited ( 中 国联合网络通信有限公司山东省分公司 ) (hereinafter referred to as “Unicom Shandong Company”) used Netcom’s 5 Internet access network services in the region of Qingdao, Shandong Province, to forcibly add advertisements to the search results pages of Baidu Company’s website. [These] acts adversely affected Baidu Company’s goodwill and economic performance and benefit, violated the principle of good faith, and [therefore] constituted unfair competition. [The plantiff] requested that [the court] hold that: 1. The acts of Aoshang Network Company and Unicom Qingdao Company constituted unfair competition with the plaintiff and [thus, the companies must] cease those acts of unfair competition. The third party [to this case must] bear joint and several liability. 2. The three defendants [must] publish a statement in the newspapers [apologizing for their acts] so as to eliminate the effects of [those acts]; 3. The three defendants [must] jointly pay the plaintiff 480,000 yuan as compensation for economic losses and 100,000 yuan [as compensation for] expenses reasonably incurred in this case. Defendant Aoshang Network Company defended its position, claiming: it did not [carry out] any act amounting to unfair competition and [therefore] should not apologize or pay 480,000 yuan as compensation. Defendant Unicom Qingdao Company defended its position, claiming: The plaintiff had no evidence to prove that [Unicom Qingdao Company] had carried out the alleged act, nor did [the plaintiff] submit evidence to prove the actual losses [the plaintiff alleged it] had suffered. The plaintiff had no competitive relationship with [Unicom Qingdao Company] and [the court] should reject all of the plaintiff’s litigation requests. Defendant Unicom Shandong Company defended its position, claiming: The plaintiff had no evidence to prove that [Unicom Shandong Company] had carried out the alleged act of unfair competition or the allegedly infringing act. [Therefore,] there was no legal basis for it to bear joint and several liability. http://www.chinaunicom.com.hk/fileservice.ashx?f=yDy%2FJ2mrNWSl9N%2F7Y6egvmzzpAkId%2BHiRSDHrEh gKwQu9jgxqsjLa2SjR%2B6h1JyBVgCxWI4gm2qlg2JM9dg%2F4SOlwrD1nFyZ. 5 Translator’s note: the name “网通 ” (“Netcom”) likely refers to “ 中国网通 ” (“China Netcom”), the abbreviated name of “ 中国网络通信集团公司 ” (“China Network Communications Group Corporation”). In January 2009, the corporation and China United Network Communications Group Company Limited ( 中国联合通 信有限公司 ) merged to form China United Network Communications Group Co., Ltd. ( 中国联合网络通信集团有 限公司 ), which is generally known as “China Unicom” (“ 中国联通 ”). For more information, see China Unicom’s Corporate Profile, at http://eng.chinaunicom.com/about/Eng -gsgl/index.html. Copyright 2015 by Stanford University 4 2015.11.15 Edition Third-Party Qingdao Pengfei International Air Travel Service Co., Ltd. (青岛鹏飞国际 航空旅游服务有限公司 ) (hereinafter referred to as “Pengfei Air Company”) stated: this case did not actually involve Third-Party [Pengfei Air Company]. The court handled the case and ascertained: The scope of Baidu Company’s business [included the provision of] Internet information services. The Baidu website, the address of which was examined and approved as www.baidu.com, primarily provided network users with Internet information search services. The scope of Aoshang Network Company’s business included network engineering and construction, [the provision of] network technology application services, and computer software design and development. Its website [domain name] was www.og.com.cn. The company stated in the “Corporate Overview” [section] of the above- mentioned website that it had four websites: China Aoshang Net (www.og.com.cn), Ouge Network Marketing Partner (www.og.net.cn), Qingdao Telephone Real Name Net (www.0532114.org), and Peninsula Talent Net (www.job17.com). When the company introduced on its website its “Network Express” business, it stated: no need to install any plug- ins, advertising webpages will forcibly appear. When [the company] introduced how the product “Search Know-It-All” performed, graphics and text were used to list the following procedures: Step One: enter keywords in the search engine dialogue box. Step Two: the space for [displaying] Network Express advertisements first appears [on the screen] (five-second display). Step Three: [While the advertisements appear on the screen] click the above- mentioned space for [displaying] advertisements to directly enter a new window of the promotional website. Step Four: after five seconds, the original window automatically displays the requested search results of Step 1. That website also used other formats to introduce the above-mentioned services. The scope of Unicom Qingdao Company’s business included [the provision of] Internet access and information services. The Qingdao Information Port ([whose] domain name was qd.sd.cn) was a website owned by [Unicom Qingdao Company]. The “Telephone Real Name” [registration system] 6 was a voice search business 7 jointly operated by Unicom Qingdao 6 Translator’s