On 14 October 2010, Tencent Technology (Shenzhen) Co., Ltd (Tencent) launched an action against Beijing Qihoo Technology Co., Ltd (Qihoo) alleging that the latter has breached Article 14 of the Anti-Unfair Competition Law(1). Article 14 of the Anti-Unfair Competition Law prohibits entities from fabricating or spreading false facts, resulting in damaging the business reputation of a competing entity
Tencent is the owner of a popular instant messaging or social networking software, most commonly known as “QQ”, which is used widely in China. Qihoo is the owner of the “360” line of security software– the main objective of these software is to protect users against computer viruses.
On 27 September 2010, Qihoo launched a free privacy software known as “360 Privacy Protector”. 360 Privacy Protector is a software that monitors whether users’ movements on the web are being “tracked” by other entities. Qihoo alleged that their 360 Privacy Protector software reported that the owners of QQ (i.e. Tencent) had breached their user’s privacy.
Tencent denied these allegations and accused Qihoo of fabricating or spreading false facts, resulting in damaging their business reputation (i.e. in breach of Article 14 of the Anti-Unfair Competition Law).
Pursuant to Article 14 of the Anti-Unfair Competition Law, Tencent and Qihoo would need to be “competing” entities. It is currently unclear what products Tencent and Qihoo compete in (however the press has reported that they compete in certain products).
If Tencent is successful in their Article 14 allegation against Qihoo, they would be able to seek damages against the latter (pursuant to Article 20 of the Anti-Unfair Competition Law).
It will be interesting to watch the development of this case – we will keep watch and report on any major developments.
 We have obtained details in relation to the Tencent-Qihoo case from publicly available press reports such as the ones located at these addresses: http://www.fawan.com/Article/Print.asp?ArticleID=288518;