Qihoo’s appeal over Tencent’s monopolistic status rejected
Source: Agencies |
October 17, 2014, Friday
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Print Edition
Print Edition
<p>The Supreme People’s Court yesterday rejected an appeal by anti-virus software company Qihoo 360 Technology Co against the ruling that Tencent was not guilty of exploiting its monopolistic market position, ending a three-year legal fight between the two Chinese Internet giants. </p><p>The supreme court upheld the original verdict that Tencent had not created a monopoly in the instant messaging market.</p><p>The court said “current evidence is not sufficient to prove Tencent’s dominance of the market,” though it acknowledged the company has captured over 80 percent of both the PC-based and mobile instant messaging service markets. </p><p>Under the first decision made by the Guangdong Provincial Higher People’s Court in March last year, Qihoo was also ordered to pay 790,000 yuan (US$129,000) to Tencent in legal fees.</p><p>Qihoo brought the case to the Guangdong court in April 2012 after Tencent in late 2010 pulled its popular online chatting software QQ from computers installed with Qihoo’s anti-virus tools.</p><p>Qihoo argued Tencent hurt its legitimate business income and stopped users from using other value-added services.</p><p>The Guangdong court ruled in March last year that the plaintiff’s request for 125 million yuan was not supported, and Qihoo appealed the verdict and brought the case to the supreme court, which announced the verdict yesterday. </p><p>In a separate lawsuit, Qihoo was ordered in February this year to pay 5 million yuan to compensate Tencent for illicit competition after it launched a computer safety software to block users from installing other value-added services related to Tencent’s QQ.</p><p>The lawsuits between Qihoo and Tencent are the first Internet company anti-trust cases in China.</p><p>Anti-trust law professor Sheng Jiemin from Peking University said the supreme court’s final judgement was prudent and professional, and will set an example for future handling of similar cases by courts. Sheng was present in court during the trial.</p><p><b>Boundary defined</b></p><p>Sheng said the supreme court has defined the boundary between fair competition and abuse of dominant status. The law doesn’t oppose companies in gaining dominant market status through fair competition, but it opposes abuse of that status, such as excluding or limiting other competitors, he said.</p><p>Fang Xingdong, founder of bokee.com, one of China’s first blogging platforms, said full competition is the best way for innovation, but sometimes competitors have crossed the line.</p><p>“The lawsuit’s significance is that it makes Internet companies understand the boundaries of competition, and makes them behave themselves,” said Fang.</p><p>Zhao Zhanling, a researcher at the intellectual property center of the China University of Political Science and Law, said competition accelerates industrial development, so justice authorities should be prudent when judging and intervening in competition. </p>
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