Chinese regulators have clamped down on medical ads on China’s leading search platform, Baidu, following the death of a 21-year-old cancer patient who undertook experimental therapy from a hospital advertised on Baidu’s platform.
The new restrictions require Baidu to add visual markers on advertisements as well as “warnings” on paid content. The search engine is also now required to limit advertisements to less than 30 percent of displayed results.
The company’s stock has fallen just under 3 percent since the announcement on Monday afternoon.
Baidu has since publicly accepted the ruling from the Cyberspace Administration of China, saying they will make the recommended adjustments by the end of the month. They will also remove support for companies that haven’t gained the appropriate regulatory approval to advertise.
Baidu’s online medical advertisements make up over 20% of the company’s total ad revenue, meaning the new restrictions could affect a significant chunk of the company’s revenue.
The issue came to a head at the beginning of the month when a post by 21-year-old university student Wei Zixi was widely circulated across Chinese social media sites and forums. The student, who passed away on the 12th of April, claimed he trusted an experimental treatment at a military-run hospital promoted on Baidu, which he later discovered had been discontinued in the U.S. due to a minimal success rate.
In a separate investigation regulators found that the hospital had been using unauthorized medical treatments, according to state media.