A high-profile dispute over online monopoly
between China's Internet giants hit the off-line world during a court hearing
in Guangzhou, China's southern Guangdong province, yesterday.
Tencent
Holdings, China's largest instant messaging service provider, was accused in
the Guangdong High People's Court yesterday of abusing its dominant market
position in a case filed by Qihoo 360, an anti-virus software company.
A
decision against Tencent could cost the company as much as 150 million yuan
(US$23.8 million) in compensation, and make the Internet giant publicly
apologise for having misused its dominant market position.
The
hearing, which attracted about 300 listeners, including experts, industry
insiders and local lawmakers, lasted for more than eight hours before the panel
of three judges announced an adjournment, without providing a date for
continuation.
Qihoo
360 has accused Tencent of violating the country's anti-monopoly laws by, among
other actions, introducing bundled sales to prevent its users from installing
Qihoo's software, said Ning Xuanfeng, one of Qihoo 360's lawyers.
Those
moves damaged the principle of fair competition, Ning said.
Tencent
denied the accusation and argued that many other applications with instant
messaging service, including Windows Live Messenger and Sina Weibo, also have
major market shares.
"In
addition, bundling sales is designed to protect Tencent's intellectual property
rights," said Xu Yan, one of Tencent's lawyers.
QQ, an
instant messaging software from Tencent, has about 76.2 per cent of the market
share, according to consulting company iResearch.
Zhang
Xuejun, the court's presiding judge, said there are issues to be clarified
before a ruling could be handed down, including how to define the
"market", whether the defendant has a dominant market position and
whether it has taken advantage of its market share.
Li
Qing, deputy director of the anti-monopoly bureau of the National Development
and Reform Commission, said at an anti-monopoly seminar on Sunday that behind
the complicated disputes are often contests for profit, and the Internet
industry should also work under the basic guide of the Anti-Monopoly Law.
"Innovation
is one of the biggest benefits of the Internet industry, which should be
protected, although companies may make mistakes while trying out new
things," said Li Guobin, a senor official from the Ministry of Industry
and Information Technology.
Wang
Bin, an official from Beijing's online copyright protection association, said
cutthroat competition has become more common in the Internet industry, and the
spat between Qihoo 360 and Tencent is just one example.
"No
matter what the ruling is, it will have a far-reaching impact on Internet
development, especially for instant messaging services," Wang said.
Zheng
Caixiong and Zhao Yinan
China
Daily
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