China’s Largest Search Engine Sues U.S. Domain Registrar Over Hacking Attack

China’s leading search engine Baidu has filed a lawsuit against New York-based domain registrar Register.com over a hack that took down the Web site, claiming the domain registrar’s “gross negligence” lead to the search giant being “unlawfully and maliciously altered.”

“Today Baidu filed a lawsuit against its domain name registration service provider Register.com, Inc. in a US court in New York, seeking damages over the incident of Baidu’s service interruption last week,” the Chinese company said in a statement.

On January 12, Baidu was hacked and defaced by a group which claimed itself as the “Iranian Cyber Army”, resulting in millions of Chinese internet users unable to access the search engine for at least three hours.

Instead of seeing the usual Baidu search engine page, Internet users were utterly shocked to find a message saying “‘This site has been hacked by Iranian Cyber Army”, complete with an Iranian flag and a shattered Star of David. Below a sentence in Farsi read, “In reaction to the US authorities’ intervention in Iran’s internal affairs. This is a warning.” According to security experts in China, Baidu’s DNS records appear to have been tampered with.

During the downtime, millions of Chinese Internet users flocked to Google instead. Traffic to Google.cn during that time increased drastically by 30%, according to sources.

This was the same technique used by the Iranian Cyber Army few weeks ago. The main reason why Twitter was targeted the Iranian Cyber Army was because the micro-blogging platform was unwittingly involved in Iranian politics. When Iran’s disputed presidential election spiraled into bloody protests, the opposition used Twitter and other social networking sites to inform the world. Twitter was even asked by the U.S. State Department to postpone a planned shutdown for maintenance, and this angered the guys behind the Iranian Cyber Army.

Filed in a New York court, Baidu’s lawsuit seeks seeks related damages and alleges “gross negligence” by Register.com led to the service disruption. The company declined to detail its losses and it failed to disclose the damages it is seeking.

Meanwhile, analysts put the compensation at 700,000 yuan (US$100,000). According to the Chinese firm’s investor report, Baidu posted revenue of 1.28 billion yuan (US$187 million) for the third quarter of 2009, which translates to an average of US$2 million a day.