​Qihoo’s Four Years Battle with Tencent

Besides the significant ongoing case over Qihoo’s private acquisition prior to its listing on the Shanghai Stock Exchange, taking place in the Cayman Islands, the company has a long history of legal disputes and confrontations. Most of these disputes involved other Chinese tech giant companies such as Baidu, the Chinese branch of Yahoo, Tencent and others. Over the next few posts, we will attempt to explain the most relevant legal processes that Qihoo has been involved in and more importantly, we will discuss the possible reasons that have led the company to involve itself in such notable court cases. 

Qihoo has a rather poor record in court when involving itself in a dispute with other Chinese tech giants; one of the most significant examples of this was the longstanding dispute between Qihoo and Tencent. The latter is a Chinese multinational investment conglomerate with more than 58,000 employees worldwide, whose subsidiaries provide a wide array of internet-related services and products. In fact, Tencent is the 15th largest public company in China with 47.2 billion USD in revenue in 2018. 

The dispute between the two companies lasted several years, being at the spotlight of Chinese tech-related news outlets and commentators for a long time. It all started in 2010 with the famous dispute titled “3Q war”, where both companies accused each other of foul play and of using their respective software to block users from accessing the competition’s software. Following a heated trial, the court ruled in favor of Tencent for unfair competition, compelling Qihoo to pay the equivalent of $800,000 USD at the time. Afterwards, Qihoo appealed to the Supreme People’s Court, which rejected the appeal in 2014, widening the company’s black record regarding appeals amid its legal disputes in China. 

When considering the company’s long record of legal disputes, with rather dubious results as (illustrated by the sound verdict of both courts in the Tencent case), it becomes clear that Qihoo’s time and resources are better spent in discreet litigation, rather than full-blown trials. While Qihoo's founder and CEO Zhou Hongyi is known to be a combative figure and someone who stands his ground, it is hard to imagine why a company that has so much to offer products-wise, would risk its assets and reputation in such embroils rather than resolving them quietly?

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