Photos reportedly showing Chen and several females naked in sexual poses became an Internet sensation in late January.
The Beijing Internet news information review council issued a statement on Monday saying, "We severely criticize Baidu's behavior.
"A picture-sharing section of Baidu.com became a platform to show and spread the obscene pictures and Baidu failed to block the photos after other Beijing-based websites had taken actions against the pictures spreading," the statement said.
The statement praised other Chinese websites that called for Internet users "not to download, save and spread the photos" and "to prevent the photos from falling into the hands of children.”
"They have shown their conscience and responsibility," the statement said.
This is consistent with the Chinese government's policies against Internet porn, which led to website shutdowns and arrests last year.