Qihoo, Sogou sue each other

The lawsuit against China's leading anti-virus software provider Qihoo 360 Technology Co launched by domestic Internet firm Sohu's search engine unit Sogou for unfair competition has been accepted by a court, Sogou said Thursday.

Sogou is suing Qihoo 360 over what it perceived as an unfair move by the latter in modifying users' computer settings to make Qihoo 360 their default browser.

According to Sogou, Qihoo 360 has been using its Internet safety products, since the Mid-Autumn Festival on September 18, to arbitrarily change users' default browser from Sogou's browser to Qihoo 360's browser. This then cannot be reset after being discovered by users, Sogou said in an e-mail sent to the Global Times Thursday.

The company decided to launch a lawsuit against Qihoo 360 over this in the Xi'an City Intermediate People's Court in Northwest China's Shaanxi Province. The court accepted the case on Wednesday afternoon, said a PR representative from Sogou on the condition of anonymity.

She told the Global Times that users from Xi'an suffered severely from the first round of modification and the company managed to obtain enough evidence in Xi'an, therefore they filed the lawsuit in a local court.

The modification was carried out in several batches at different times, involving many Sogou browser users around the country, which had a bad impact on the company's short-term interest and brand value, said Sogou, demanding 45.5 million yuan ($7.4 million) from Qihoo 360.

Sogou CEO Wang Xiaochuan called Qihoo 360's practices "immoral" in the press release.

In response to this, Qihoo 360 also filed lawsuits against Sogou and Wang Xiaochuan in the Beijing No.2 Intermediate People's Court and Beijing Xicheng District People's Court respectively on Wednesday, said a statement sent to the Global Times Thursday. The cases have not been accepted by the courts yet, said the company.

According to the statement, Sogou maliciously bonded its browser product with its typing software, therefore "inducing" users to install Sogou's browser when they have installed the typing software, therefore "as an Internet safety service provider, we are obliged to protect users and help them to restore their original browser."

Qihoo 360 said they did not commit any unfair competitive acts, claiming that it was Sogou that was actually doing this and asking for an open apology and compensation of 50 million yuan from the company and 1 million yuan from Wang Xiaochuan for damages to its reputation.

Zhao Zhanling, a legal counsel with the Internet Society of China, told the Global Times Thursday that Qihoo 360 is very likely to lose the legal contest, largely because it is hard for the company to prove that it is protecting users from malicious plug-ins when domestic laws have yet to determine what the malicious binding and plug-in are.

"It is hard to predict the final result, but Sogou will surely gain lots of market attention during this process," said Zhang Yi, CEO of Shenzhen-based Internet research firm iiMedia Research.

The battle came after Sogou merged with Tencent's search business Soso as well as obtained a $448 million investment from Tencent, the largest domestic Internet company by market value, on September 16.

With Tencent's support, Sogou is likely to directly challenge Qihoo 360 in the search engine world, resulting in an intense competition between the two, said Zhang.

Data from Beijing-based consultancy firm Analysys International indicated that Baidu still led the domestic Web page search engine industry in July with a market share of 65.14 percent of page views, Qihoo 360 came in second with 15.4 percent, and Sogou ranked third with 9.16 percent. Soso was in fourth place with 3.92 percent.

The combined market shares of Soso and Sogou could reach 13.08 percent, putting them close to second.