Yahoo China Wins Suit Against Competitor

Alibaba.com, which owns Yahoo's operations in China, said Thursday that it had won a unfair competition lawsuit against another China search engine operator. The owners of Qihoo will be required to compensate Yahoo China and end their anti-competitive practices.

Qihoo is operated by Beijing Sanjiwuxian Internet Technology, and is run by a former Yahoo employee who left shortly after the announcement last year that Alibaba would take over Yahoo's China operations. Zhou Hongyi created 3721, which Yahoo bought in 2003 to enter the Chinese market.

According to the lawsuit filed by Yahoo China, Qihoo's antivirus software called 360safe would tell users of Yahoo China's toolbar to uninstall the application, claiming it was malware. However, the court found that this was not the case.

Beijing's Second Intermediate Court said that such actions were anti-competitive and ordered the company to change its software. Additionally, Qihoo must make a public announcement saying that Yahoo China's software is not malicious in nature.

An undisclosed monetary penalty is also to be paid to Yahoo China, Alibaba.com said in a public statement. Beijing Sanjiwuxian says it intends to appeal the verdict.

This is not the first time these two companies have been in court. Qihoo previously sued Yahoo China over claims of defamation. Both Zhou and Alibaba's founder Jack Ma are among the most outspoken entrepreneurs in China, say news reports.