BIDU Baidu Inc

BEIJING—China's government is launching an investigation into Internet search giant Baidu Inc. following the death of a young man with cancer who had taken a therapy found through an online advertisement.

The Cyberspace Administration of China announced Monday that it is joining with the national health commission and another agency to investigate the "Wei Zexi incident." In doing so, the administration noted that Mr. Wei's death last month "drew widespread attention" from Internet users.

Mr. Wei, a 21-year-old college student, suffered from a rare cancer called synovial sarcoma that affects tissue around major joints.

After he received radiation and chemotherapy, his family sought alternative treatments and found via Baidu a 200,000 yuan ($31,000) therapy at a Beijing hospital that proved ineffective, according to statement from the family released through the financial news magazine Caixin on Sunday.

In a statement, a Baidu spokeswoman said the company regrets Mr. Wei's death, will cooperate with the investigation and is committed to providing "a safe and trustworthy search experience for our users." Baidu "will give no quarter to fake information or illegal activities online," the statement said.

Mr. Wei's death was the second time this year that Baidu has come under fire for its handling of the balance between profits from advertising and the responsibility to its users regarding medical information.

Baidu is China's dominant search engine, with a market share of about 80%, and many Chinese turn to it to look up medical advice.

Like other search companies, Baidu earns a large portion of its revenue from selling ads. In the first quarter of this year, online ads comprised about 94% of Baidu's revenue.

In an earnings call on Friday, chief financial officer Jennifer Li told analysts that medical care was one of the company's top sectors.

In January, Baidu faced online fury after it sold the management rights to a bulletin-board platform for patients with hemophilia to a company that Internet users said populated the site with questionable information.

The Internet regulator criticized Baidu, which acknowledged its mistakes and said it would stop trying to make money from patient forums.

In Mr. Wei's case, criticism from Baidu is coming from some of largest, most influential state-media companies.

The government's news agency, Xinhua, accused Baidu in a commentary on Monday of abusing search technology to sell out its users for profit.

"Making money by allowing companies to pay for better search placement is to put a good tool in the hands of interest-seekers with bad intentions," it said.

In their statement, Mr. Wei's parents said they aren't seeking compensation and don't plan to sue. "We harbor no hatred for Baidu or the hospital," they said.

In the statement, the family said that after Mr. Wei had undergone several rounds of radiation and chemotherapy, they went online to research treatments in an effort to keep the cancer from recurring.

Their search found an immunotherapy treatment offered by the Beijing Armed Police Corps No. 2 Hospital, which is advertised as "the world's most advanced," the statement said.

Mr. Wei underwent four treatments at the hospital, but his family said they "didn't see good results."

Baidu said the company doesn't work with unqualified private hospitals, and that it has a team that ensures its medical advertisements comply with Chinese laws.

It added that it has a set of procedures and requirements to ensure safe advertising.

On Thursday, on its Twitter-like Weibo account, Baidu said the hospital where Mr. Wei sought treatment is a qualified medical institution.

Calls to the hospital were unanswered on Monday night.

(END) Dow Jones Newswires

May 02, 2016 14:15 ET (18:15 GMT)

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