Orange Hotel Wins Lawsuit against Unfair Competition

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(Free-Press-Release.com) December 15, 2009 -- Green Tree Inn and Yahoo China’s parent company Alibaba have engaged in unfair competition and affected the normal operation of Orange Hotels, the Chaoyang District People’s Court of Beijing Municipality ruled on December 11th, 2009. The ruling came with a monetary judgment of RMB 67,000 yuan in damages and a 30-day continuous apology statement publicizes on Green Tree Inn’s homepage. The other plaintiff Yahoo China reconciled with Orange Hotels, marking the end of the one-year legal ordeal.

According to Orange Hotels’ filing to the court, it discovered that when using the keyword “Orange Hotel” on Yahoo’s Chinese search engine, the result page contained hyperlinks saying “Orange Hotels deluxe room only costs RMB99.8” and “wanna book Orange Hotels, why don’t come stay with Green Trees instead?” The links would redirect users to Green Tree Inn’s homepage. Orange Hotel claimed that this paid search result had damaged its brand image as a well-known design hotel chain and directly led its potential customers to rivalry’s website. This was an infringement of Orange Hotels’ brand property and should be considered as an unfair competition. Yahoo China and Green Trees Inn were sued for unfair competition with RMB 107,000 in damages and Orange Hotels demanded public apology.

According to the lawyer acting for Orange Hotel Group, the Group has 16 hotels in China, which positions as hip and trendy, affordable design hotel in the market. The hotel chain enjoys public praise and a good reputation among its peers. Green Trees Inn initiated unfair competition in a bid to rob Orange Hotel of its potential customers and erode the hotel’s market share. The malicious action against Orange Hotel is bond to affect the hotel’s business credit standing and taint its public image, making future marketing more difficult. “Comparing Orange Hotels’ brand with a low-end budget hotel will confuse the potential customers and causes brand damage.” The lawyer said.

Insiders say during the legal process, similar links can be found on Baidu and Google. But Orange Hotel’s officials deny to respond on this issue.

Last year, the search engines were constantly exposed to media scrutiny with a focus on regulatory legislation. Industry practitioners say self-discipline is as important as laws and regulations. Companies should compete fairly in accordance with basic business ethics. It’s short sighted to launch hostile competitions.

In November 2008, Baidu was accused on the official China Central Television, or CCTV, of allowing the unlicensed providers of medical services to buy prominent positions on its paid-search platform. The large number of "clicks" showed that those ads for expensive but useless therapies had indeed attracted many unwary consumers.

Currently, China’s internet is still rigged with false information, pornography and online violence. A solution calls for the joint efforts from government agencies, business associations and internet companies.

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