Top court upholds dismissal of Qihoo 360 lawsuit

A high-profile, four-year battle between two Chinese Internet and technology giants has ended as China's top court dismissed Qihoo 360's anti-monopoly lawsuit against Tencent Inc.

The Supreme People's Court announced on Thursday that it affirmed the original judgment of the Guangdong Provincial High People's Court.

In 2011, Qihoo 360, the leading anti-virus and security software provider, sued Tencent, known for the instant-messaging services WeChat and QQ, accusing it of unfair competition and seeking 125 million yuan ($24.5 million) in damages.

The lawsuit came after Tencent had sent a letter to QQ users in 2010 that said QQ would not run on computers that had Qihoo 360's anti-virus software installed.

The provincial court dismissed Qihoo 360's lawsuit in March 2013, leading to the appeal to the nation's top court.

The top court said on Thursday morning that the anti-monopoly law tends to focus on whether the market is healthy and competition is disruptive, and not on individual business operators' interests. The evidence provided by Qihoo 360 did not prove Tencent abused its market position, the court added.

Tencent's legal representatives said that they were glad to see the case had been resolved through judicial procedures.

"But we have realized our responsibilities and challenges in the industry, and we'd like to obey rules with other companies. What we want is to provide better products and services for more users," the company added.

Lawyers for Qihoo 360 said they respect the verdict, although they are sorry about the result. "But we believe our dispute will encourage the industry's development and focus people's attention on online competition. It's more meaningful and important."

While Qihoo's lawsuit was ongoing, Tencent sued Qihoo 360 in 2012 for unfair competition. That case also went to the top court. In February, the top court affirmed the Guangdong court's earlier ruling that Qihoo 360 had engaged in unfair competition and should pay Tencent 5 million yuan.

Wang Guohua, an attorney specializing in Internet company cases, said he does not think disputes between such enterprises are a bad thing.

"Lawsuits are an effective way to improve the health of cyberspace and make online competition fairer. After all, we demand answers on who is right to guide the industry," he said.

Zhang Chaoyang, better known as Charles Zhang, the founder and chairman of Sohu, one of China's biggest Internet portal owners and video-site operators, also said that courts are the best choice for two Web companies in conflict.

"What we need is not blind appeals or compromise solutions, as those options will not reveal the roots of the problems," Zhang said at a forum in September.

Liu Junhai, head of commercial law study institute at Renmin University of China, agreed, said he hopes the cases between the two giants encourage competition and enhance self-discipline in the industry.