Medical NGOs file complaint against Baidu

As many as 36 non-government healthcare organizations have requested an investigation by the Beijing authorities into what they claim are inappropriate marketing practices by Baidu Inc.

The NGOs filed the collective complaint against the Nasdaq-listed online search giant on Thursday with the Beijing Administration for Industry and Commerce.

They accused Baidu of violating the Advertisement Law by allowing misleading medical advertisements to be placed, and asked the authorities to launch an investigation.

Baidu said in a statement on Thursday that all medical institutions that conduct online marketing on its platforms need to be licensed, and it welcomed public scrutiny.

Investors appeared little concerned by the claim, with Baidu's share price rising 3.73 percent on Thursday to $172.23. The Beijing Administration of Industry and Commerce was not available for comment.

The complaint was the latest development in what has been a difficult week for Baidu.

The firm first came under fire after an Internet user accused the online search company of selling medical-related forums hosted by Baidu Tieba - its community-based group discussion service - to a commercial buyer.

Yiyou Gongyi, one of the 36 NGOs, claimed on its Sina Weibo account that Tieba's inappropriate move was only "the tip of the iceberg" of allegedly false advertising practices.

A forum used by 5,000 hemophilia patients as a platform to discuss and share information about the condition and its treatments, was discovered to have been sold.

Baidu announced on Tuesday it would cease the commercialization of any forum that focuses on diagnosis and treatment of illness, and invited nonprofit organizations to operate them.

Tieba has 300 million monthly active users, a huge potential online marketing tool.

Tian Hou, an analyst at TH Capital in Beijing, said most of Baidu's revenue is made from online search services.

"To stop monetizing medical-related forums on Tieba would certainly affect Baidu's business, but it won't hurt the company's overall performance in the short term," she said.