Authored by Dr. Zhan Hao (firstname.lastname@example.org)
On 18th April, 2012, the case of dispute on the abuse of dominant market position filed by Qihoo 360 (NYSE: QIHU) against Tencent (HKEX: 700) was heard in the Superior People’s Court of Guangdong Province, with the claim of 150 million RMB. It should be recognized that, whether in terms of the claim amount or close involvement in people’s everyday life of the goods or services provided by the two parties, the fact that 360 vs Tencent case has aroused wide attention is not a surprise.
Parties of the Case
Qihoo 360 Technology Co Ltd (referred to as “Qihoo 360”), is engaged in the operations of Internet services and sales of third party anti-virus software in the People’s Republic of China. It provides Internet and mobile security products in China. In January 2011, the Company had 328 million monthly active Internet security product users, representing a user penetration rate of 83.9% in China.
Shenzhen Tencent Computer Co Ltd , Tencent Technology (Shenzhen) Co Ltd (together referred to as “Tencent”), Tencent’s diverse services include social networks, web portals, e-commerce, and multiplayer online games. It operates the well-known instant messenger Tencent QQ and runs one of the largest web portals in China, QQ.com.
As of December 31, 2010, there were 647.6 million active Tencent QQ IM user accounts, making Tencent QQ the world’s largest online community. The number of simultaneously online QQ accounts has sometimes exceeded 100 million.
In this trial, Qihu 360 alleged that Tencent abused its dominant position in the instant messaging software and services market in China to force users to uninstall 360 software, therefore, constitutes violation of article 17 of the Anti-monopoly Law of PRC. However, two sides have divergence from the starting point of definition of relevant market to market share information and further to whether the defendant possesses a dominant position.
Highlight in this Case
Different from the past, the two sides both invited expert witnesses to the Court this time. Qihu 360 engaged David Stallbass, who served for the Fair Trade Office in London and Tencent engaged Jiang Qiping, who is the Secretary-General of Information Research Center in Chinese Academy of Social Science. Would the points of experts have significant influence on the result of antitrust case in the absence of jurisprudence and necessary data is eagerly expected.
After a “persistent verbal war” lasting for 7 hours, this trial ended up with an adjournment. According to relevant sources, 360 vs Tencent case would be a “protracted war” and a second trial is expected.