Behind Baidu’s keyword search: Be aware of fraud risks and borrowing costs being raised in disguise?

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Has Baidu failed to fulfill its duty in causing confusion among users and even leading to the spread of fraudulent information?

Have you ever had this experience? When you need a loan, you search for a financial institution on Baidu. Even though you enter the full name of the institution, the first few search results often do not have this company. Some titles even have the name of the company, but when you click on the page, another loan institution is displayed. These search results that are not what you want are quietly marked with the word "advertisement" by Baidu at the end. Sometimes you may not find the page you are looking for even after flipping through the first page.

The mystery behind one word search

"When users search for our company's name, the first few entries that appear will have nothing to do with our company. Our competitors can buy out our related entries, so the first few are mostly advertisements for other companies. Even if our company's name appears in the title of the search results, when you click on it, it will be another loan company. For example, if the title says A, but you click on it and find that it is the website of company B." A consumer finance industry insider complained to reporters.

A reporter from 21st Century Business Herald randomly searched the name of Company A, which is engaged in the consumer finance industry and backed by a fully licensed financial institution. It was found that the first five results were all advertisements. When clicked on, each entry had no direct connection with the searched company, and some were even from competing companies.

For example, the first one is an advertisement for fintech investment in Hong Kong.

The second entry is titled "Ping An Bank loan download Du Xiaoman Finance high loan limit quick payment application", although it appears to contain part of the search company terms, but in fact, when you click on it, you will see an advertisement for "Du Xiaoman" Finance, an Internet financial platform under Baidu.

The third entry is the loan page of the loan intermediary platform Rong360.

The fourth entry is the page for Cigna’s critical illness insurance, which mainly provides insurance services, which is far from the loan demand.

Although the fifth entry also contains the original name of the company that the reporter searched for in the title, it is split into two words. When you click on it, you will find that it is a loan consulting platform called "Rong Duoduo" and the company name is "Rong Duoduo Loan Agency (Dongguan) Co., Ltd.". The reporter searched through Qichacha and found that it is a company called "Shenzhen Jiuyi Rongke Information Technology Co., Ltd.". The only shareholder is a natural person, not a licensed financial institution.

It was not until the sixth entry that the reporter found the official website of consumer finance lending institution A.

The reporter also tried the name of a consumer finance company B headquartered in Shandong. Although the company's name appeared in the first entry, when he clicked on it, it was Du Xiaoman Finance. The second entry was a small loan company located in Lanzhou, Gansu. The third entry was a guarantee company. The fourth entry was Rongduoduo again. The official website was in the sixth entry, "covered" by various advertisements.

A person from a Shanghai-based institution engaged in consumer finance loans, which has not yet conducted advertising cooperation with Baidu, revealed to reporters that since Baidu often cannot find them, they often receive complaints from users. This year they had to set aside part of their budget to cooperate with Baidu in brand zones. Baidu's current quotation is about 400,000 yuan per month, and the annual quotation is about 1 million yuan.

"Baidu's cooperation is divided into brand zones and 'big search'. The former means that there will be different quotations based on the number of brand words and the corresponding Baidu index of the brand words. One word has one price, and financial companies purchase according to their own needs; 'big search' is a bidding ranking mechanism. You can buy your own keywords, or you can buy other people's keywords, even those of friendly competitors." An insider of a consumer finance company located in the central region told reporters.

Home search results may contain fraud risks

It is worth noting that "XX consumer finance company" is a word that is strongly related to the brand, but these companies often need to purchase some additional precise search terms, such as "XX consumer finance customer service phone number" and "XX consumer finance repayment phone number". People from consumer finance companies said that if they do not purchase, false fraud phone numbers are likely to appear, which will cause a lot of trouble for the company.

"Fraudulent phone calls are even more terrifying. We have encountered many customers being deceived. Many of the phone numbers start with 029. They will tell customers that their accounts have been frozen and they need to pay a thawing fee. They will then ask them to add a customer service number, which is usually a WeChat or QQ account. Many consumers do not have the ability to distinguish information and just intuitively believe that the first page of results from Baidu search will not be wrong, but they are deceived in this way."

The reporter searched for Jinshang Consumer Finance Company, which has a consumer finance license. When the company name was followed by "customer service phone number," a variety of results appeared. One result showed a phone number starting with 029, which was in Xi'an. When the reporter called, the number was busy.

When the reporter used this phone number to search Baidu again, he found that in addition to the above-mentioned consumer finance companies, this landline number was also linked to "Guazi Used Car Customer Service Phone", "Haofenqi Customer Service Phone", "Ping An Car Loan Service Hotline", etc. Since so many lending institutions share the same phone number, it is obviously impossible to "dial lending institutions nationwide with one click".

The reporter again searched some fields that express borrowing needs but have vague semantics, such as "consumer loans", "bank loans", "consumer finance", etc. Generally, Du Xiaoman Finance will appear in the first or second entry, and sometimes there are even the words "Industrial and Commercial" and "Bank" in the entries, which at first glance are mistaken for the Industrial and Commercial Bank of China; there are also several loan intermediary companies and small loan companies that often appear, and some of them have "formal bank loans" in the entry titles. After the reporter's inquiry, even some unlicensed loan intermediaries are also disguised as "Ping An Bank Consumer Finance Loans". If consumers do not carefully distinguish, they may easily mistake them for banks and other formal loan institutions and fall into the trap.

Raising borrowing costs

On March 12, the reporter raised questions about the financial search results to Baidu. As of press time, the other party said that it was investigating the relevant situation but did not make any other response.

Zhou Chenxia, ​​a lawyer at Jincheng Tongda Law Firm’s Shanghai office, told reporters that the above situation of Baidu search financial advertisements will inevitably lead to higher customer acquisition and marketing costs for consumer finance institutions, because each company will be in a situation where they “have to invest” in search engine services.

In recent years, the competition among consumer finance companies in acquiring customers has become increasingly fierce. In the past few years, the development relied on cooperative models such as loan assistance and joint loans to acquire customers. At present, domestic supervision of loan assistance and joint loans has become increasingly strict. The transformation of licensed institutions to self-operation has become a major trend. Self-operation requires licensed institutions to develop and obtain traffic on their own, and then increase investment in Internet advertising. The increase in cost investment may not have an obvious impact on borrowing costs - because the interest rate regulation of borrowing costs itself has regulatory requirements, but the principle of "the wool comes from the sheep" remains unchanged. Microfinance cannot be a development path for Internet companies that rely on subsidies and burning money to expand their scale. The increased costs must be compensated in terms of revenue, and interest income is the most direct and main income. The impact of cost increases on interest rate pricing is difficult to say without any correlation.

Has Baidu failed to fulfill its duty in causing confusion among users and even leading to the spread of fraudulent information?

Lawyer Zhou said that from the perspective of administrative law, the bidding ranking information displayed by Baidu search can be included in the category of advertising. If the content of the advertisement is not verified and causes confusion to users, the corresponding responsibility should be borne. Baidu has been interviewed by regulatory authorities many times for such issues and has also suffered many administrative penalties. From a civil perspective, on the one hand, as the confused party, the company can claim that Baidu has engaged in unfair competition and require Baidu to stop unfair competition and compensate for related losses. On the other hand, if users are deceived and suffer losses due to Baidu's confusing behavior, they can also require Baidu to bear certain fault liability.

However, as the world's largest Chinese search engine, it is difficult to say for sure whether Baidu has a monopoly.

Lawyer Zhou said that according to the provisions of my country's Anti-Monopoly Law, if a single operator has a market share of one-half in the relevant market, it can be presumed to have a dominant market position. The Beijing No. 1 Intermediate People's Court once confirmed in a case that search engine services are not exempt from the application of the Anti-Monopoly Law because they are free to users. Therefore, whether Baidu has a dominant market position is more based on its market share in the relevant market.

"However, whether Baidu constitutes an abuse of market dominance regulated by the Anti-Monopoly Law still needs to be judged in combination with the specific circumstances. Combined with the Anti-Monopoly Guidelines of the Anti-Monopoly Committee of the State Council on the Platform Economy, which was just released in February this year, the platform's search demotion, blocking of stores, etc. are all included in the scope of abuse of market dominance by limiting transactions. In the future, the standards for determining whether Baidu has abused its market dominance may be more relaxed." Lawyer Zhou said that since Baidu is not a case regulated by the Anti-Monopoly Law, such as restricting transactions in the traditional sense, it does not belong to the shopping platform's monopoly on goods involved in the above-mentioned "Guidelines", but is more of a use of the platform's advantages to conduct search demotion. Therefore, whether Baidu is suspected of prohibited monopolistic behavior remains to be seen.