China FlagThe Baidu scandal appears to have triggered a wave of investigations for Baidu and also for on-line market places.  This scandal has led regulators to hold numerous briefings to say it was looking into the matter and temporarily close the hospital at the center of the case.

Regulators are now focusing on misrepresentation and antitrust. In one of the first major national moves to address this kind of rampant misrepresentation, China’s commerce regulator has just said it is launching a 6 month campaign to enhance supervision of online marketplaces.   China’s anti-trust regulator said it intends to launch a systematic, large-scale investigation into pricing used by both Chinese and foreign drug makers. The last crackdown looks related to another issue that’s close to Beijing’s heart, namely, national security. That instance has seen a number of domestic cloud service providers close down over concerns about sensitive content being hosted on their servers.

The State Administration for Industry and Commerce (SAIC), which posted a fairly detailed note on its website explaining the objectives for its 6 month cleanup campaign of online marketplaces (English article; Chinese article). Those objectives are quite broad ranging, and cover everything from scrutiny of product quality, operating licenses and trademark violations.

Anti-Trust Probe:  The second crackdown in the drug sector also looks partly related to the Baidu case, though it’s quite possible this particular plan was already in the works before the scandal broke last week. That will see the National Development and Reform Commission (NDRC), one of China’s main anti-trust regulators, collect information on whether any drug makers violated anti-competition rules (English article).

The final crackdown appears to be the work of one of China’s government censors, and has seen domestic cloud service providers Vdisk, KuaiPai and UC net disk all suddenly shutter their services to comply with government regulations (English article). Those names may not sound too major, but they’re actually backed by the much better-known trio of Sina (Nasdaq: SINA),Xunlei (Nasdaq: XNET) and Alibaba (NYSE: BABA), respectively.

Source: Seeking Alpha