China's Supreme Court opens trial on Internet giants

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China's Supreme Court opens trial on Internet giants

(Xinhua) 08:31, November 27, 2013

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BEIJING, Nov. 26 -- The case between Chinese Internet giants Qihoo 360 and Tencent over monopolies and unfair practices opened at the Supreme People's Court (SPC) on Tuesday.

Antivirus software developer Qihoo 360 and China's largest Internet company, Tencent, have been engaged in a protracted legal war since 2010, attracting great public interest. The trial can be observed by the public through various media including newspapers, TV programs and the Internet.

Morning session proceedings included investigation, debate and mediation, with no ruling handed down.

Their feud began on Sept. 27, 2010, when Qihoo 360 accused Tencent of invading the privacy of its users through QQ Doctor, a security program developed by Tencent for use with its popular QQ instant messaging service. Qihoo 360 claims that Tencent has used the software to scan and monitor users' personal information.

Following the complaint, Qihoo 360 released its own security software called "Koukou Guard" on Oct. 29, 2010, claiming it would speed up QQ and offer better privacy. Tencent responded by warning its users that the "Koukou Guard" could cause QQ to malfunction.

In November 2012, Qihoo 360 sued Tencent claiming it had abused its dominant position in the Internet marketplace.

In March 2013, Guangdong Higher People's Court rejected Qihoo's suit against Tencent, and Qihoo has now appealed to the SPC.

The court has to clarify several major facts and settle a dozen disputes in this case, Wang Chuang, chief judge of the SPC trial, told Xinhua.

The court has to define what the "Internet marketplace" is in this case and whether Tencent has a monopoly in this marketplace, Wang said.

Also, the court will decide whether the defendant has violated the anti-monopoly law and how the civil compensation is to be delivered, he said.

Legal experts and practitioners expected the trial to set a benchmark for anti-monopoly lawsuits, which have been rare since the anti-monopoly law took effect in 2008.

Yao Kefeng, a Beijing-based lawyer, told Xinhua that the court should take into account the rights of consumers, in this case the rights of Internet users, when deciding whether the competition between the two companies was fair.

Prof. Liu Junhai, of the Law School at Renmin University of China, suggested that the court hold public hearings attended by representatives of smaller players in the market and consumers to examine whether the companies abused a dominant position in the market.

"Broader participation of the public will provide solid support for the court verdict," Liu said.