China firm takes Baidu to court on monopoly claim

BEIJING, April 23 (Reuters) - Inc BIDU.O has been accused of abusing its dominant market position to punish a client company, which is seeking 1.1 million yuan ($161,000) in damages, according to a Beijing court.

The Beijing No. 1 Intermediate People’s Court said on its website that a verdict was pending.

Renren Information Service Co said China’s top Internet search engine had violated the anti-monopoly law when it restricted search access to a subsidiary’s website as punishment for reducing advertising spending with Baidu, the court said.

Nasdaq-listed Baidu denied the charges, said the court. Baidu officials were not immediately available for comment.

Baidu was forced late last year to remove questionable paid search listings from customers that did not have proper licenses, after state television reported Baidu had sold links to unlicensed medical sites with unproven claims for their products.

Baidu also has open court cases brought by Sony Music 6758.TSNE.N, Warner Music WMG.N and Universal Music VIV.PA, accusing it of directing users to unauthorised music download websites.

Renren said that after reducing its advertising with Baidu, the search engine quickly moved to reduce access to Renren’s website, the court said.

Officials from Renren were not available to comment.

Renren told the court the number of visits to its website dropped sharply after it reduced its spending with Baidu.

A search for the company on the U.S.-based search engine Google GOOG. found 6,690 pages, while only four were found on Baidu, a Renren official told the court.

Baidu search traffic continued to be strong in the first part of 2009 as the company attracted more small firms because of the high effectiveness of its search advertising, said JP Morgan analyst Dick Wei in a note on Thursday. ($=6.83 yuan) (Reporting by Kirby Chien, Editing by Ian Geoghegan)