US Judge Dismisses Free Speech Case Against Baidu Inc (ADR) (BIDU)

US Judge Dismisses Free Speech Case Against Baidu Inc (ADR) (BIDU)

A US judge has dismissed a lawsuit against Baidu Inc (ADR) (NASDAQ:BIDU) brought by pro-democracy advocates that said the Chinese search engine had illegally suppressed free speech.

Plaintiffs sought $16 million in damages

The plaintiffs, eight writers and video producers, claimed in Manhattan court that Baidu Inc (NASDAQ:BIDU), acting on instructions from the Chinese government, created search-engine algorithms that blocked information promoting freedom of speech and democracy.  The group had sought $16 million in damages for violations of their civil rights.

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US District Judge Jesse Furman, however, said in his ruling that “The First Amendment protects Baidu Inc (NASDAQ:BIDU)’s right to advocate for systems of government other than democracy (in China or elsewhere) just as surely as it protects plaintiffs’ rights to advocate for democracy.”

Is a search engine more like a newspaper or a town hall?

Drawing comparisons between a search engine right to editorial judgment and that of a newspaper editor, the Judge ruled “To allow plaintiffs’ suit to proceed, let alone to hold Baidu Inc (NASDAQ:BIDU) liable for its editorial judgments, would contravene the principle upon which our political system and cultural life rest: that each person should decide for himself or herself the ideas and beliefs deserving of expression, consideration, and adherence.”

Plaintiffs plan appeal

Furman ruled there was a “strong argument” that the First Amendment protected search results from “most, if not all” kinds of civil liability and government regulation.

This drew sharp criticism from the plaintiffs, who said they would appeal.  “The court has laid out a perfect paradox: that it will allow the suppression of free speech, in the name of free speech,” Stephen Preziosi, the plaintiff’s lawyer, was quoted as saying following the ruling.

Preziosi found fault in Furman’s search engine / newspaper-editor comparison.  He said the Baidu search engine is “more analogous to a town square, where pretty much anyone can go and say what he wants.”

The lawsuit comes nearly one year after Google cited Chinese government censorship and pulled its search engine out of China. China later blocked Google Inc (NASDAQ:GOOG)’s YouTube service, which was recently blocked in Turkey.  China also blocked social networking sites such as Facebook Inc (NASDAQ:FB) and Twitter Inc (NYSE:TWTR).

Furman had previously dismissed the plaintiff’s lawsuit on procedural grounds, but later reversed his decision and allowed the case to proceed.

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Mark Melin is an alternative investment practitioner whose specialty is recognizing a trading program’s strategy and mapping it to a market environment and performance driver. He provides analysis of managed futures investment performance and commentary regarding related managed futures market environment. A portfolio and industry consultant, he was an adjunct instructor in managed futures at Northwestern University / Chicago and has written or edited three books, including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008). Mark was director of the managed futures division at Alaron Trading until they were acquired by Peregrine Financial Group in 2009, where he was a registered associated person (National Futures Association NFA ID#: 0348336). Mark has also worked as a Commodity Trading Advisor himself, trading a short volatility options portfolio across the yield curve, and was an independent consultant to various broker dealers and futures exchanges, including OneChicago, the single stock futures exchange, and the Chicago Board of Trade. He is also Editor, Opalesque Futures Intelligence and Editor, Opalesque Futures Strategies. - Contact: Mmelin(at)

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