360 v. Tencent | |
---|---|
Court | Supreme People's Court |
Full case name | Qihoo 360 v. Tencent, Inc. |
Decided | 2016 |
Citation(s) | (2013)民三终字4号 ( pinyin: (2013) Min San Zhong Zi No. 4) Stanford Law School China Guiding Cases Project, English Guiding Case (EGC78), Apr. 7, 2017 Edition |
360 vs Tencent is a dispute between two Chinese IT companies, Tencent and Qihoo, over competition practices that has escalated in November 2010, and hundreds of millions of users were forced to choose sides in the dispute. [1] It is the first anti-monopoly case to be heard by the Supreme People's Court since the Anti Monopoly Law of China was promulgated. [2]
At the time Qihoo, the producer of the anti-virus software 360 Safeguard, was a competitor of QQ Doctor, which gained 40% of the Chinese market overnight when it bundled with Tencent QQ. On September 27, 2017, Qihoo released privacy guard software that showed QQ's suspicious spying activities on its users. Tencent then responded with a fabricated report alleging that Qihoo was under investigation for ads involving pornographic websites, as that Qihoo was attempting to gain support from its competitors in the anti-virus front like Baidu, Kingsoft, and Kaspersky Lab.[ citation needed]
Later Qihoo alleged that QQ scans the installed programs in user's computer based on a "super black list", and attacked TenCent CEO Ma Huateng, saying he had been receiving government subsidies for housing. Qihoo also updated its privacy guard software to block ads in QQ, [3] Tencent's responded by filing an unfair competition lawsuit against Qihoo and released an update that blocked Tencent products from running on machines with 360 Safeguard installed. Hundreds of millions of Chinese computer users were forced to choose sides in the legal conflict by choosing to, either uninstall QQ or 360's privacy guard. [4]
A case of “abuse of dominant market position”, the first anti-monopoly law (AML) private enforcement case that was initially brought to and examined by the provincial high people's court.
The Guangdong High People's Court issued a judgment [5] that was both controversial and highly criticized by commentators.
In their judgment they held that:
Tencent was found to not have abused a dominant market position. [5] [6] [7] [8]
Dissatisfied with the decision of the Guangdong High Court, Qihoo decided to appeal to the Supreme People's Court.
By far, the Supreme Court's written judgment is the best and most professional, both judicially and technically, judicial judgment of its kind ever amongst all AML cases in China. Given the judicial power and nature of the Supreme Court, this judgment established and reaffirmed several very important judicial rules with precedent case law effect insofar as the private enforcement of AML is concerned. These important judicial rules include:
Qihoo v Tencent was designated as a guiding case by the Supreme People's Court. While China does not have case law guiding cases can be considered to be persuasive precedents.
Yu Fei, CEO of Langezhiyang International Sales Consultant Principal, speculates that the dispute resulted from poor competitive strategy.[ citation needed]
In a poll conducted by Sina, 1.06 million users, or 79% of the participants, agree that the two companies "care more about their business interests than about their users." [9]
Kingsoft and Kaspersky made their security services free for one year shortly after the dispute escalated. [9]
On November 4, 2010, the day after Tencent stopped messaging service on computers with 360 installed, TencentHolding ( SEHK: 700) lost 10.6 billion HKD, or 3.1% in market capitalization, including 1.1 billion HKD for Tencent CEO Ma Huateng. Kingsoft ( SEHK: 3888) jumped 17.86% and gained 784 million HKD in market cap. Another instant messaging software producer Beijing Shenzhou Taiyue Software Corp., Ltd ( Shenzhou Taiyue) ( SZSE: 300002) increased by 3.7%. [10]
Microsoft's MSN may be seen as the winner of this dispute, as it agreed to integrate their products with Sina "in areas including microblogging, blogging, instant messaging, information content and mobile services." [11] [12]
On November 10, 2010, Qihoo 360 said they are going to resume their product's compatibility with QQ. [13]