Internet giants' brawl ends with Qihoo 360's final loss

China's Supreme People's Court (SPC)rejected an appeal by Qihoo 360 in its monopoly lawsuit against Tencent on Thursday, ending a three-year legal battle between the two Chinese Internet giants.

The SPC maintained an earlier ruling stating that Tencent had not created a monopoly, and Qihoo 360's appeal has been rejected, according to the SPC's final judgement.

Qihoo 360 was also ordered to pay 790,000 yuan (128,674 U.S. dollars) to Tencent in legal fees according to the first court decision made by the Guangdong Provincial Higher People's Court in March last year.

The SPC said, "current evidence is not sufficient to prove Tencent's dominance of the market," though it admitted the company has taken more than 80 percent of the market share in both the PC-based and mobile instant messaging service markets.

Tencent has more than 1 billion registered users for QQ, the most popular online chatting tool in China, while Qihoo 360, a leading anti-virus software provider, has over 300 million clients.

The legal battle started in October 2011, when Qihoo 360 sued Tencent for hindering market competition and abusing its market position. It also asked for 150 million yuan as compensation.

The first trial lasted for nearly a year starting on April 18, 2012 and ended in a ruling in favor of Tencent.

"360 respects the SPC's judgement, but we feel sorry for the result," said a statement distributed to the reporters by Qihoo 360 staff in front of the top court after the Thursday ruling.

The statement, titled "Sacrifice me, benefit all," said though Qihoo 360 lost the lawsuit, its groundbreaking challenge against Tencent has promoted an innovative environment for Internet companies and pushed the opening and competitiveness of China's market economy.

A statement Tencent e-mailed to Xinhua reporters said that the company supports and respects the court decision and the judgement is a milestone in leading and regulating the orderly competition of China's Internet industry.

Tencent also filed charges against Qihoo 360 for unfair competition in 2012 and won while being sued by the latter. Qihoo 360 was ordered by the same Guangdong court to pay five million yuan as compensation and apologize to Tencent in April 2013.

The compensation sum was the highest that has ever been ordered in an Internet competition lawsuit in China.

Qihoo 360 held a press briefing in Beijing immediately after the 2013 judgement. At that time, Zhou Hongyi, CEO of Qihoo 360, said that the ruling showed a tendency toward regional protectionism, as Tencent is based in coastal Shenzhen City in Guangdong.

Qihoo 360 appealed to the SPC, with its appeal rejected again in February this year.

The pair had an earlier feud in 2010, when Qihoo 360 accused Tencent of invading the privacy of its users through a security program bundled with Tencent's popular QQ instant messaging service.

Following the complaint, Qihoo 360 released its own security software, claiming it would speed up QQ and offer better privacy.

The dispute escalated when Tencent said on Nov. 3, 2010 that it would shut down the QQ service on computers that had security software created by Qihoo 360 installed on them, and asked users to make a choice.

Both companies apologized to Internet users after being ordered by the Ministry of Industry and Information Technology to stop fighting, but the war continued to escalate until the SPC's final decision on Thursday.