Qihoo 360's unfair competition appeal rejected

China's Supreme People's Court (SPC) on Monday rejected the appeal of Qihoo 360, a major Chinese antivirus software developer, and upheld the original sentence that it had competed unfairly against China's leading Internet company Tencent.

In a statement, the SPC said Qihoo 360, driven by commercial purposes, lured and provided tools for users to change the operation mode of Tencent's QQ software.

Its aim was to attach itself to QQ software users and promote Qihoo 360's own security program by derogating QQ software and its service so as to gain advantage in the market, the SPC added.

These acts, which are in nature unfair use of other's market achievements to seek for its own commercial opportunity and gain competitive advantage, constituted unfair competition and Qihoo 360 shall bear corresponding legal responsibilities, according to the SPC.

The feud between Qihoo 360 and Tencent began in 2010, when the former accused the latter of invading the privacy of its users through a security program bundled with Tencent's popular QQ instant messaging service.

Following the complaint, Qihoo 360 released its own security software, claiming it would speed up QQ and offer better privacy.

Tencent sued Qihoo 360 for unfair competition, accusing it of interfering with and judging Tencent's software in violation of honesty, credibility and commercial ethics.

The Guangdong Higher People's Court ruled in favor of Tencent in April 2013, demanding Qihoo desist, apologize and pay five million yuan (about 820,000 U.S. dollars) in compensation.

Qihoo then turned to the SPC for a re-trial.

The case was overseen by SPC Vice President Xi Xiaoming.

According to the SPC, it is the most expensive and influential unfair practices case in China's Internet industry to date.

The SPC clarified and set up competition rules in related market through the trials and the outcome has formed a "milestone" on promoting orderly competition among Internet companies and optimizing allocation of market resources, it said.