China's number one search engine giant Baidu has come under scrutiny from the country's technology regulator following complaints that the company is resorting to many unethical practices like pornography, fake advertisements and leak of personal information.

One of Baidu's top executives was grilled for many hours on Friday by officials from the State Internet Information Office. Officials from the technology regulator later noted that Baidu would face severe legal penalties for its unethical business practices.

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While indulging in pornography and fake advertisements are damaging to Baidu's Image, at the heart of the latest controversy is that Baidu had replaced volunteer moderators with a private hospital on one of its popular health forums. This health forum is part of Baidu's official website Tieba.com.

Chinese citizens have accused this private hospital of offering substandard medical advice to netizens. Baidu has also been accused of overlooking the health of netizens to boost its profit.

In wake of all these accusations and complaints, Baidu made an official statement on its Weibo account saying "We've heard a broad range of criticism and advice from media and netizens, as well as the voices of Tieba users. This incident has exposed a dereliction of duty in the management of our Tieba commercialization."

With regard to the accusation of offering substandard medical advice, Baidu categorically stated that it would soon partner with a non-profit organization to improve the quality of the medical information on Tieba.com.

This is actually not the first time that Baidu has been accused of unethical business practices. In the past, the internet search giant has faced acquisitions of modifying its search results to favor certain companies.

These latest accusations, however, can prove to be more damaging. After years of recording impressive profits, Baidu has been struggling to increase its profit and revenue for past couple of quarters. Its last quarterly results in July, 2015 was in fact highly disappointing.

TagsBaidu scandal, Baidu China