Brazilian Court Convicts Giant App Company Baidu of Unfair Competition
Brazilian superior court upholds conviction: Baidu's deliberate behavior intentionally harmed global company PSafe
29 Mar, 2018, 09:00 ET
SAN FRANCISCO, March 29, 2018 /PRNewswire/ -- An unprecedented lawsuit has attracted attention from Internet businesses and the legal community worldwide. On February 28, 2018, a Brazilian appeals court upheld Baidu Internet Ltd., LLC, Inc. Brazilian subsidiary of Chinese Internet giant Baidu, for violating unfair competition laws against tech start-up PSafe Technology. The District Court of the State of São Paulo ("Tribunal de Justiça de São Paulo (TJ/SP"), in a unanimous vote, confirmed that Baidu practiced unfair competition in violation of Brazil's commercial law by programming its own Android app (DU Speed Booster) to state that that PSafe's flagship Android app (dfndr security) was a virus and should be immediately uninstalled. The decision marks the first time a Brazilian court has upheld an application of the country's unfair competition laws against an Internet and/or software company.
In its written decision, the Brazilian court cited, "Baidu's deliberate behavior focused on influencing users and denigrating PSafe's image, often causing users to uninstall [PSafe's] apps."
In one of its key lines of defense, Baidu tried to disqualify the technical report of the court-appointed forensic expert from the University of São Paulo, who had examined both PSafe's and Baidu's apps. After analyzing several versions of Baidu's applications, the expert concluded that Baidu's threat warning about PSafe's app was blatantly false and purposefully misleading. The court rejected Baidu's challenge of the expert's report, declaring that [there are] "few times one sees a forensic analysis conducted so carefully and attentively."
David and Goliath
The lawsuit is being referred to as the "David vs Goliath" case, a metaphor from the Biblical story of a small man winning a fight against a giant. "Our victory not only vindicates PSafe, but also creates a legal precedent for fair competition in the technology ecosystem," said Marco DeMello, CEO at PSafe.
According to the Brazilian court's decision, Baidu must publish a public retraction in its communication channels and social networks, pay PSafe for material and moral damages, and compensate PSafe's loss of profits. In support of the court's decision, the judge explained that "there is no conduct more harmful to a company that offers security software than to have its products identified as a virus that is [causing] vulnerabilities and risks to consumers' safety."
The full text of the court's decision, in Portuguese, is available here: Brazil Court Decision.
PSafe Technology is a leading provider of mobile security, privacy, and performance optimization apps. The company is dedicated to delivering innovative products that protect consumers' freedom to safely connect, share, play, express, and explore online. The flagship antivirus and anti-hacking app, dfndr security, with 130+ million installs globally, has consistently been named as a top-rated antivirus software by AV-TEST Institute — the world leader in security and antivirus research. To safeguard and enhance users' online experiences, the company's app portfolio continues to grow and now includes a cleaning and boosting app—dfndr performance, a virtual private network app, dfndr vpn, a private storage app—dfndr vault, and a battery performance app—dfndr battery. PSafe is funded by Redpoint Ventures, e.ventures, RPeV, Pinnacle Ventures, and Index Ventures. The company is headquartered in San Francisco, CA with offices in Brazil and numerous satellite employees around the globe.
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