Caixin
Oct 17, 2014 06:49 PM

Top Court Clears Tencent of Anti-Virus Firm's Accusation It Enjoys Monopoly

(Beijing) – The country's top court agreed with a lower court on October 16 that Internet giant Tencent Holdings Ltd. did not abuse its dominant position to hurt other businesses.

Qihoo 360 Technology Co. had sued Tencent, accusing it of having a monopoly. The lawsuit was the first anti-trust case in the country's growing Internet sector, and was watched by the industry, legal experts and Internet users.

The Supreme People's Court supported a ruling by the top court in Guangdong Province, which ruled against Qihoo. The court in the southern province ordered Qihoo to pay 796,800 yuan in legal costs.

The lawsuit was the result a dispute between Tencent and Qihoo in 2010. Qihoo blocked certain functions of Tencent's messaging service QQ. This prompted Tencent to tell QQ users that they could not use the program on computers running Qihoo's anti-virus software.

Tencent says more than 700 million people use QQ, and Qihoo says 400 million computers run its anti-virus software.

Qihoo filed a lawsuit in the Guangdong court in October 2011, seeking 150 million yuan. In March 2013, the court ruled that Qihoo had insufficient evidence to support its claims and ordered Qihoo to pay legal costs. Qihoo then appealed to the country's highest court last year.

That court said Tencent's move to block QQ use on computers with Qihoo software was only intended to protect its business and had little impacts on users. The ban was only in place for a day, the court said, leading to rival messaging service MSN seeing an increase of 23 million users. The court said this showed that QQ did not have a dominant position in the messaging service field.

Legal experts said the ruling by the Supreme People's Court will set an example for judges in future lawsuits related to monopolies in the Internet sector.

Having a majority of a market's share is not the sole factor in whether a company is dominating a market, said Tao Jingzhou, Asian managing partner of the U.S. law firm Dechert LLP. Other factors, such those taking into account competition in the field, also play an important role.

(Rewritten by Guo Kai)

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