360 Loses First Case over Incompatibility, Court Finds That 360 Misled Users to Uninstall Kingsoft

BEIJING, May 16, 2011 /PRNewswire-Asia/ -- First Intermediate People's Court today pronounced its judgment: 360 has committed unfair competition by defaming and force uninstalling commercial product Kingsoft Antivirus WebShield Service. The court ordered 360 to immediately stop all acts of unfair competition, give a public explanation to remove the effects and pay an indemnity of 300,000 yuan. It was the first time that a court found that 360 maliciously misled users to uninstall software of its rivals, sounding a warning to anti-virus software companies that have done so time and again.

According to the verdict, the court found that 360 committed an act of infringement and ordered it to immediately stop all acts of unfair competition, pay 300,000 yuan in compensation to Kingsoft and publish an explanation on the home page of the official website of 360 for seven consecutive days to remove the negative effects on Kingsoft Antivirus WebShield Service.

The court said in the verdict that 360 Security Guard guides users towards agreeing to uninstall Kingsoft Antivirus WebShield Service in a message box by producing the pop-up message box during its installation, upgrade and running. The court said that although the message box provides an option to uninstall 360 Security Guard, but the dialog box only provides an option to stop the installation of Kingsoft Antivirus WebShield Service and the option is checked by default, and the option to uninstall 360 Security Guard is set differently from the option to uninstall Kingsoft Antivirus WebShield Service.

The court held that instead of giving Internet users a free choice, the act of 360 Security Guards has an obvious tendency and will mislead consumers.

The court further said that after leading users to uninstall Kingsoft Antivirus WebShield Service, 360 Security Guard will delete Kingsoft Antivirus WebShield Service in a destructive way. The court found that 360 Security Guard has violated the principles of voluntariness, equality, fairness and good faith and committed unfair competition.

Regarding 360's slanderous acts such as spreading rumors that Kingsoft Antivirus WebShield Service contains loopholes via its software, official website and media, the court held that 360 has failed to submitted sufficient evidence proving the above allegation and seriously damaged the business reputation of Kingsoft and the commercial reputation of Kingsoft Antivirus WebShield Service.

According to the verdict, 360 once claimed that there are loopholes in Kingsoft Antivirus WebShield Service, but 360 failed to provide any strong evidence in hearing of the case, while Kingsoft submitted notarized and more valid evidence to refute the allegation.

The court concluded that 360 lacked sufficient evidence to support its claim made through its software and official website that there are loopholes in Kingsoft Antivirus WebShield Service and has committed unfair competition.

360 Security Guard deliberately set up an obstacle in its software to force uninstall Kingsoft Antivirus WebShield Service in May last year and thereafter published a series of fictitious articles on its official website under the title Explanations Concerning Kingsoft Antivirus WebShield Service Interfering With the Running of 360 Security Guard, in which it defamed Kingsoft Antivirus WebShield Service by alleging that it obstructs the normal running of 360 Security Guard, fabricated stories to smear Kingsoft Antivirus WebShield Service by saying that it contains loopholes and distorted the facts by claiming that Kingsoft Antivirus WebShield Service is inferior to 360 Security Guard in an attempt to scare consumers away from using Kingsoft Antivirus WebShield Service and inflict further damage on Kingsoft security software.

Kingsoft believes that these acts have constituted grossly unfair competition and seriously interfered with the normal order of operations of Kingsoft. In less than one year since 360 Security Guard carried out the incompatibility tactic on May 21, 2010, Kingsoft Antivirus WebShield Service who once had 80 million users lost more than 90% of its users.

Kingsoft Antivirus WebShield Service is a software product launched by Kingsoft in 2009 when it tested waters for free anti-virus services for the first time. Due to that it possesses exclusive online security protection technology that was developed over ten years or so, it has successfully solved problems such as Trojan horse that have been nagging users for many years and is ranked first among similar software.

At the end of 2009, 360 launched 360 WebShield after the fashion of Kingsoft Antivirus WebShield Service, but so far it is still technically behind Kingsoft. Kingsoft Antivirus WebShield Service 360 loomed threateningly behind Security Guard by maintaining a high growth momentum. In May 2010 when the number of Kingsoft Antivirus WebShield Service users approached 100 million, 360 mobilized 360 Security Guard that had 300 million users to launch a smear campaign based on incompatibility arguments and induce users to force uninstall Kingsoft Antivirus WebShield Service.

360 Security Guard has been force uninstalling and smearing rival software and has been constantly involved in disputes over incompatibility. Lawsuits it has lost include: it once rated Baidu software as "malicious plug-ins", 360 was sentenced to pay a compensation of 385,000 yuan; it once developed a so-called privacy protector to scare Tencent users, 360 lost the case and was sentenced to pay a compensation of 400,000 yuan; in addition, 360 Security Guard also alerted users to the "danger" of Maxthon browser to induce users to install 360 security browser, interfered with the running of Sogou and Tencent browsers, sabotaged the start-up of Kingsoft Antivirus WebShield Service and QQ Computer Manager on boot and so on.

But these lawsuits it has lost failed to have any impact on 360. In less than half a year's time, 360 has lost lawsuits against it one after another over it engaging in unfair competition with Baidu, Tencent and Kingsoft, but the total amount of competition is about RMB one million, less than a fraction of the RMB1.2 billion 360 raised through its listing in the U.S. in May this year.

Just last month, board chairman of 360 Security Guard Zhou Hongyi lost a lawsuit for fabricating stories to smear Kingsoft on his microblog and was sentenced to pay a compensation of 80,000 yuan, which is a drop in the ocean compared to either the direct and indirect economic losses suffered by Kingsoft then or Zhou Hongyi's personal wealth of 600 million U.S. dollars.

Schedule I: A Summary of Unfair Competition Lawsuits 360 Has Lost

In December 2010, 360 rated Baidu software as malicious to induce users to uninstall the software and was sentenced to pay a compensation of 385,000 yuan.

In March 2011, board chairman of 360 Zhou Hongyi fabricated stories to defame Kingsoft and was sentenced to pay a compensation of 80,000 yuan.

In April 2011, 360 wickedly slandered Tencent software and was sentenced to pay a compensation of 40, 0000 yuan.

In May 2011, 360 smeared Kingsoft to induce users to force uninstall Kingsoft Antivirus WebShield Service and was sentenced to pay a compensation of 30, 0000 yuan.

Schedule II: Chronicle of Unfair Competition Perpetrated Against Kingsoft Antivirus WebShield Service by 360

On January 7, 2009, Kingsoft Antivirus WebShield Service was released

On November 20, 2009, 360 browser blocked Kingsoft Antivirus WebShield Service

On February 26, 2010 360 WebShield was released

In April 2010, the number of users of Kingsoft Antivirus WebShield Service exceeded 70 million

On May 21, 2010, 360 Security Guard employed an unfair method of competition to force uninstall Kingsoft Antivirus WebShield Service

On May 31, 2010, Kingsoft formally sued 360 for unfair competition.

On February 21, 2011, Kingsoft Antivirus WebShield Service was upgraded to Cloud Shield Plan and its functions were broken down and embedded into Kingsoft Antivirus, King Safe and Baidu, Sogou and Maxthon browsers

Screenshot of 360 Security Guard Inducing Users to Force Uninstall Kingsoft Antivirus WebShield Service.(http://www.ijinshan.com/zhuanti/zswd/index.html & http://www.ijinshan.com/zhuanti/zswd/images/ill3_big.jpg )

About Kingsoft Cloud Shield

Kingsoft Cloud Shield Plan opens cloud security services including site safety and file safety query, allows providers of third-party applications such as web browsers, search engines, instant messaging, e-commerce, online games and software download tools to use authorized interfaces free of charge and responds to more than one billion queries each day. 98% of the samples are identified in one minute.

Website: http://code.ijinshan.com/api/

About Kingsoft Network

Kingsoft was established in November 2010. It is a professional security company resulting from the merger of Kingsoft Security and Keniu and inherited the technology accumulation of Kingsoft over 14 years and the Internet gene of Keniu. Since its inception, Kingsoft Network has been taking improving China's Internet security environment as its objective and the highest standard for its value. It has launched the "FREE" strategy to create a truly free and secure network environment for users through professional and free Internet security services. At present permanent free software products of Kingsoft Network include: Kingsoft Antivirus, King Safe, Kingsoft Antivirus WebShield Service, Keniu Antivirus, Keniu Photo, etc.

Website: http://www.ijinshan.com

Microblog: http://t.sina.com.cn/duba

SOURCE Kingsoft