Marbridge Daily

Tencent Wins Unfair Competition Suit Against Qihoo 360

Donews, 4/25/13

The Guangdong High Court issued a ruling today in favor of Chinese internet and mobile services firm Tencent's (0700.HK) allegation of unfair competition against internet services and security software provider Qihoo 360 (NYSE: QIHU). However, Tencent's request of a full RMB 125 mln in compensation for economic damages was denied for lack of evidence.

The Guangdong High Court's ruling states that Qihoo 360 is to pay Tencent RMB 5 mln in compensation. Qihoo 360 is also to make a public apology to Tencent on its own website and in prominent displays on other media outlets for 15 consecutive days. Additional requests brought by Tencent in the lawsuit were denied. Of the RMB 666,800 in court fees accumulated during the case, RMB 166,800 is to be paid by Tencent, and RMB 500,000 by Qihoo 360. Counsel for Qihoo 360 has stated the company's intention to appeal the case.

In September 2010, Qihoo released its "360 Privacy Protector," which included features that monitored Tencent's QQ IM client to ensure that it did not infringe on user privacy. In November of that year, Tencent required users to choose between using the company's QQ client software or that of Qihoo 360, which set off ongoing conflict between the two companies. Tencent eventually filed suit against Qihoo 360 alleging unfair competition, calling for Qihoo 360 to cease infringing upon Tencent's rights, and to pay damages in the amount of RMB 125 mln. In October of 2010, Qihoo 360 filed a lawsuit against Tencent alleging that its rival was abusing its market position, and demanding RMB 150 mln in damages.

Editor's Note: Early editions of Qihoo's "360 Privacy Protector" allowed QQ users to block all advertisements from appearing on the QQ desktop client. For more information on this topic, please see "Tencent, Qihoo 360 Trade Lawsuits," MD 10/15/10 and "Qihoo 360 Loses Anti-Trust Suit against Tencent," MD 3/29/13 issues.

Keywords: Internet Tencent QQ 0700.HK Qihoo 360 QIHU IPR infringement litigation penalty law