Netcom and BaiduPay, our consolidated affiliated entities, own the necessary domain names and trademarks, including pending trademark applications and have the necessary personnel and facilities
to operate our websites. It remains unclear whether the provision of online payment services by BaiduPay will require BaiduPay to apply for a Value-Added Telecommunication Business Operating License for online data processing and transaction
processing businesses as provided in the Catalog of Telecommunication Businesses promulgated by the MIIT, although in practice many companies conducting such business do not apply for such license. Baidu Netcom, parent company of BaiduPay, has
received a Trans-Regional Value-Added Telecommunication Business Operating License with the permitted operation scope covering online data processing and transaction processing businesses. Baidu Netcom plans to submit an application to allow its
subsidiary BaiduPay to operate online data processing and transaction processing businesses in 2017.
Regulations on Mobile Internet
On August 1, 2016, the State Internet Information Office promulgated the Administrative
Provisions on Mobile Internet Application Information Services, or the Mobile Application Administrative Provisions. Pursuant to the Mobile Application Administrative Provisions, mobile internet application refers to application software that runs
on mobile smart devices providing information services after being pre-installed, downloaded or embedded through other means. Mobile internet application providers refer to the owners or operators of mobile
internet applications. Internet application stores refer to platforms which provide services related to online browsing, searching and downloading of application software and releasing of development tools and products through the internet.
Pursuant to the Mobile Application Administrative Provisions, an internet application program provider must verify a
users mobile phone number and other identity information under the principle of mandatory real name registration at the back-office end and voluntary real name display at the front-office end. An internet application provider must not enable
functions that can collect a users geographical location information, access users contact list, activate the camera or recorder of the users mobile smart device or other functions irrelevant to its services, nor is it allowed to
conduct bundle installations of irrelevant application programs, unless it has clearly indicated to the user and obtained the users consent on such functions and application programs. In respect of an internet application store service
provider, the Mobile Application Administrative Provisions requires that, among others, it must file a record with the local authority within 30 days after it rolls out the internet application store service online. It must also examine the
authenticity, security and legality of internet application providers on its platform, establish a system to monitor application providers credit and file a record of such information with relevant governmental authorities. If an application
provider violates the regulations, the internet application store service provider must take measures to stop the violations, including warning, suspension of release, withdrawal of the application from the platform, keeping a record and reporting
the incident to the relevant governmental authorities.
In December 2016, the MIIT promulgated the Interim Measures on the
Administration of Pre-Installation and Distribution of Applications for Mobile Smart Terminals to enhance the administration of mobile applications. The Interim Measures require, among others, that mobile phone manufacturers and internet information
service providers shall ensure that a mobile application, as well as its ancillary resource files, configuration files and user data can be uninstalled by a user on a convenient basis, unless it is a basic function software, which refers to a
software that supports the normal functioning of hardware and operating system of a mobile smart device. The Interim Measures will come into effect on July 1, 2017.
Regulations on Internet Information Search Service
In June 2016, the State Internet Information Office promulgated the Administrative Provisions on Internet Information Search
Services, or the Search Services Administrative Provisions, which took effect on August 1, 2016. Pursuant to the Search Services Administrative Provisions, internet information search service refers to the service whereby users can search for
information that is collected from the internet and processed by computer