With the rapid development of China’s digital economy, various new forms of unfair competition have emerged in the internet sector. Recently, the Beijing Intellectual Property Court upheld the first-instance judgment of the Haidian District People’s Court, which found that Shenzhen I Love Network Technology Co., Ltd. (hereinafter referred to as I Love Network) had engaged in unfair competition by using an artificial click farming platform to help merchants fabricate click volume, interfere with the search engine algorithm of Beijing Baidu Netcom Science and Technology Co., Ltd. (hereinafter referred to as Baidu), and hinder its ranking results. The court ordered I Love Network to publish a statement, eliminate the impact, and compensate Baidu for economic losses and reasonable expenses totaling 2.05 million yuan.

Click farming platform causes lawsuit Baidu is a well-known internet company that invests huge costs every year to operate its search engine. I Love Network is the operator of the website “I Love Advertising Task Network”. In its operation, Baidu found that I Love Network had set up an advertising task publishing platform “I Love Advertising Task Network”, which helped induce website users to set up and click on search tasks, taking advantage of the fact that user click behavior accounted for a certain proportion of the algorithm in Baidu’s search ranking. It was suspected of helping users create false click data and disrupt the original objective ranking results. Baidu argued that I Love Network had obtained improper benefits by taking a cut from user recharge coins and monetizing traffic, disrupting the competitive order and constituting unfair competition. In 2020, Baidu sued I Love Network to the Haidian Court, requesting it to eliminate the impact and compensate 5 million yuan. In response to Baidu’s allegations, I Love Network argued that it did not use any technical means to interfere with or damage Baidu’s network products, but introduced its own users to Baidu’s website through its own website, where they completed the search operation independently, equivalent to offline “intermediary introduction” behavior. Although it did not obtain Baidu’s consent, it did not violate the subjective will of the users who carried out the behavior, nor did it cause any loss to Baidu or have any adverse impact on Baidu’s reputation. The Haidian Court held that Baidu analyzed the data of clicking on search engine related results through algorithms. If based on false access data, Baidu would make wrong algorithm judgments, which would increase the distance between users and their desired websites, and ultimately lead to its loss of competitive advantage in the search engine network service industry. I Love Network’s behavior of artificially increasing the click volume of target websites was essentially creating false user search demand, making the search results more matched with keywords, increasing the weight of target websites in search engines, and interfering with Baidu’s search engine ranking algorithm. This behavior not only increased Baidu’s various costs of maintaining normal search operation services, damaged Baidu’s normal service environment, but also disrupted the market competition order, constituting unfair competition regulated by Article 2 of the Anti-Unfair Competition Law. Therefore, the Haidian Court ruled in the first instance that I Love Network should compensate Baidu 2.05 million yuan. I Love Network then appealed to the Beijing Intellectual Property Court, which rejected its appeal and upheld the original judgment.

Legal application becomes focus As one of the rare cases in China involving artificial click farming platforms interfering with search engine algorithms, this case has attracted widespread attention from the beginning. How to characterize the behavior of artificial click farming platforms interfering with search engine algorithms and how to apply relevant provisions of the Anti-Unfair Competition Law to regulate it have become hot topics among industry insiders. Wang Ke, a lawyer from Zhonglun Wende Law Firm in Beijing, told China Intellectual Property News that this case clarified that the competitive relationship regulated by the Anti-Unfair Competition Law is not limited to narrow-sense peer competition relationship, but also includes broad-sense non-peer competition relationship that causes competitive interest damage by eliminating one another. In addition, this case clarified four factors for determining whether the accused behavior is unfair under the framework of Anti-Unfair Competition Law, including whether the accused behavior causes damage to other operators’ legitimate rights and interests, whether the means and methods of the accused behavior have adverse effects on other operators’ legitimate operations, whether the accused behavior damages consumers’ rights and interests, and whether the accused behavior disrupts normal market competition order. Dai Jing, a senior consultant at Beijing Qiancheng Law Firm, told this newspaper that after confirming that there was a competitive relationship between Baidu and I Love Network, both courts analyzed and excluded that applying Article 8(2) of Anti-Unfair Competition Law regulating helping other operators make false publicity and Article 12 regulating operators shall not use technical means to interfere with or damage other operators’ network products or services, and found that the accused behavior did not belong to the unfair competition behavior stipulated in Articles 8 and 12 of Anti-Unfair Competition Law, while excluding other specific provisions in Chapter 2 of Anti-Unfair Competition Law. In this case, the court based on Article 2 of Anti-Unfair Competition Law requiring operators to follow the principles of voluntariness, equality, fairness and honesty in their production and operation activities, and comply with the provisions of laws and business ethics as the legal basis for the final judgment of this case, thus providing a trial idea for similar cases.

Clear guidance helps development As stated in the judgment of this case, search engine service is the basis and core of Baidu’s business operation. Based on false access data such as click farming, it will eventually lose its competitive advantage in the search engine network service industry. What warning significance does this case have for such internet service enterprises? How should relevant enterprises prevent such unfair competition behavior and protect their own rights and interests? Wang Ke said that this case shows that click farming and other network black and gray industries are unfair, which not only damage other operators’ competitive interests, but also damage consumers’ legitimate rights and interests and disrupt normal market competition order, which should be severely punished by law. This case provides clear behavioral guidance for network service industry operators, that is, they should conduct honest operation in accordance with laws and regulations, and not engage in improper behavior that violates business ethics. At the same time, it also reminds operators to pay attention to not only the homogenous competitive behavior of peer competitors, but also expand their horizons and pay attention to the relevant behavior of upstream and downstream operators in the industry. They can also consider whether other operators’ behavior is proper from the perspective of protecting consumers’ rights and interests and maintaining market competition order. In Dai Jing’s view, internet service enterprises should pay special attention to the protection of their own legitimate rights and interests in daily operation and system operation, constantly establish and improve the algorithm mechanism, regularly audit, evaluate and verify the algorithm mechanism mechanism, data model, continuously invest in improving the quality of search service, timely optimize the algorithm, and take anti-cheating related technical protection measures for false click volume data and other behaviors to prevent illegal interference with algorithm behavior. “When infringement occurs, relevant enterprises should maintain their own legitimate commercial economic benefits and competitive advantages. They should do ‘three timeliness’: timely conduct research on similar cases, especially for new types of internet infringement business models; timely collect and fix evidence, including subject qualification evidence, infringement fact evidence, damage compensation standard evidence; timely initiate legal rights protection procedures. For network black and gray industries such as click farming, they can protect their own rights and interests by administrative complaints, lawsuits and other means.” Dai Jing suggested.