Baidu may face tough penalties in fallout from student’s death: analysts
Authorities could also tighten up on online ads for the health-care industry
Internet search giant Baidu could face stiff penalties and health-care-industry digital ads could be subject to tougher controls in the aftermath of a university student’s death, according to analysts.
Shaanxi computer science student Wei Zexi, 21, suffered from a rare form of cancer and sought experimental medical treatment at a hospital in Beijing that topped a Baidu search result. He chronicled his ineffective treatment online, and his death last month prompted a public outcry.
The analysts said on Tuesday that they expected Baidu, which has more than 70 per cent revenue share of China’s online search market, to receive more than a cash fine if found guilty of misconduct as a publisher of digital advertising or for violating certain regulations.
“Violations of China’s advertising laws and regulations are subject to penalties, and even the potential termination of advertising operations or removal of a business licence,” Morningstar senior equity analyst Marie Sun said in a report.
The Cyberspace Administration of China, the State Administration for Industry and Commerce, and the National Health and Family Planning Commission on Monday formed a task force to investigate Baidu following Wei’s death.
Baidu scandal: spotlight on China military hospitals’ outsourcing practice after young man’s cancer death
Nomura analyst Shi Jialong said in a report that to appease the public “the task force could convict Baidu of wrongdoing at the end of its investigation and suggest certain punishments”.
