China to Investigate Law Violation in Tencent-Qihoo 360 Spat

11/22/2010 Source: People’s Daily

Two Chinese Internet giants — Tencent and Qihoo 360, apologized to Internet users after being ordered to stop their spat and officials vowed to investigate the dispute to determine whether actions by either company had broken the law.

Both of the companies posted an apology letter on the company websites Sunday night.

Qihoo 360 said the companies’ software had resumed operation and the two sides would stop mutual accusations.

This was after China’s Ministry of Industry and Information Technology (MIIT) Sunday ordered the two companies to publicly apologize within five working days.

The business war between the two Internet giants had triggered a public outcry.

Tencent, China’s largest Internet company, said on Nov. 3 that it would shut down the QQ instant-messaging service on computers installed with security software made by Qihoo 360 following a dispute between the companies.

Tencent’s move marked an escalation in its dispute with Qihoo 360 that began more than one month ago. The two sides have accused the other of improper business practices.

On Sept. 27, Qihoo 360 accused QQ of invading the privacy of its users through scanning, monitoring and loading information with QQ doctor, a security software developed by Tencent.

Following this, Qihoo 360 released a safety software called “Koukou Guard” on Oct. 29, claiming it could speed up QQ and offer more privacy to its users. However, Tencent responded by warning its users that the “Koukou Guard” caused QQ to malfunction.

Tencent has 600 million registered QQ users, while Qihoo 360, China’s largest free anti-virus software provider, has 300 million clients.

The unfair competition between the companies, especially the move to unilaterally shut the instant-messaging service, had affected users and caused “bad social consequences”, the MIIT statement said.

Further, the ministry announced it would take effective measures to ensure the fair, just and orderly competition within the Internet market to protect the interests of Internet users.

An on-line survey conducted by showed about 80 percent of Internet users regarded the two giants’ actions to be selfish and had harmed the interests of their clients.

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