Yahoo! China sued Qihoo back in late September of this year for unfair competition. The lawsuit claimed that Qihoo software, known as “360safe”, prompts users to de-install the Yahoo! Toolbar. The prompt made users believe that the toolbar was “malware”, and was difficult or almost impossible to remove.
“Their activities reflect some of the practices in the market and we want to call on the entire market to be vigilant about people like that and to stop malicious practices or anti-competitive behaviour,” Joseph Tsai, Alibaba’s chief financial officer, told Reuters.”
The people Tsai was referring to was Zhou Hongyi, a former Yahoo! employee who sold his search engine 3721 to Yahoo! in 2003 before Alibaba bought them in China. He left shortly after it was announced Alibaba would take over Yahoo! China. Tsai now heads Qihoo, a search engine run by Beijing Sanjiwuxian.
The court ruling which came from Beijing’s Second Intermediate Court said that “such actions were the breach of fair business competition tactics and that Sanjiwuxian must change its software” . Qihoo must also make a public announcement that Yahoo China’s software is not malicious.
Alibaba said that as part of the ruling, Qihoo must pay monetary penalty to Yahoo! China. The company, however, didn’t specify the size of amount.