NetEase Sues Tmall for Hijacking Traffic With Misleading Ad Placements

NetEase Sues Tmall for Hijacking Traffic With Misleading Ad Placements

Tang Shihua

Date: Fri, 03/16/2018 - 14:26 / source:Yicai
NetEase Sues Tmall for Hijacking Traffic With Misleading Ad Placements
NetEase Sues Tmall for Hijacking Traffic With Misleading Ad Placements

(Yicai Global) March 16 -- NetEase Inc., one of China’s leading internet firms, has filed a lawsuit against Alibaba Group Holding Ltd.’s online business-to-consumer marketplace Tmall, accusing the platform of misleading customers with inappropriate keyword searches online.

The suit, filed at Beijing Haidian District People’s Court, alleges Tmall manipulated search engines to mislead and reel in potential NetEase customers, the court said online. Beijing-based NetEase is seeking CNY10 million (USD1.6 million) in damages and requests Tmall apologize and cease the behavior.

Tmall promoted its website to users searching for the keywords “Huihui,” “Huihui guide” and “Huihui shopping guide” on the Qihoo 360 search engine, and jacked up its bid price to ensure the ads came out at the top of results pages, according to NetEase. Huihui is a price comparison website and software run by the plaintiff, which believes Tmall intentionally confused consumers to redirect them to its own services.

Search engines generate income by offering premium search results and ad placements to advertisers, with the highest bidder’s promotion being prioritized. China’s regulators ordered the country’s largest search provider Baidu Inc. to better manage the practice for healthcare promotions after a college student who claimed he received distorted medical advice by following such adverts died in spring 2016.

 

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Keywords: E-COMMERCE, Illicit Competition, Litigation, Alibaba, Tmall, Netease