奇虎360诉腾讯QQ滥用市场支配地位案一审评析（三）
Perspective on the First Instance of Qihoo 360
Suing Tencent QQ for Abuse of Dominant Position in Market
June 20th, 2013 by Feng Jiang, Lawyer from GuangDong BaiLiFu LAW FIRM，Guangdong Province ,China
Keywords: Qihoo 360, Tencent QQ, Anti-monopoly in Internet, Abuse of Dominant Position in Market
Abstract: Based on the Judgment of first instance made by The High People's Court of Guangdong Province (hereinafter, referred to as “GDHC”) of case sued by Beijing Qihoo technology Co.Ltd. (Hereinafter, referred to as “Qihoo
I. Definition of Relevant Market,
A. Definition of Relevant Market by QIHOO 360
QIHOO 360 considers, Instant Message software market means the system service used for real-time communication, which allows more than one to use and transfer text messages, documents, phonetics, and video etc. It is hard to replace the instant message service with E-mail and telephone communication. Thus these do not belong to the same market. Only Chat Function of Micro blog is in same market with Tencent QQ, not Micro blog itself. The involving geographic market in the Case shall be Mainland Market in
B. Definition of Relevant Market by Tencent QQ
Tencent QQ believes that, Instant Message software & service market include “vocal message,” of QIHOO 360, “Youni ,” of SNDA，“iMessage”of APPLE," WO friends" of UNICOM , “ Fetion”, “Ali wangwang,” “ Baidu Hi” &“ YY voice” . Furthermore even Sina Microblog also has Chat Function, all these should be put into Instant Message software & service market. If Tencent QQ charges, it has great possibility of 87% users to change for other product. Actually it is easy to enter into and expand in Instant Message software & service market. The involving geographic market in the Case should be Global Market.
C. Judgment of Relevant Market by GDHC
Firstly, Definition of Commodity Market
Although GDHC believes that the Relevant Commodity Market is Instant Message software & service market, neither GDHC agrees Qihoo
Secondly, Definition of Geographic Market
GDHC upholds Tencent QQ’ view on Global Market, instead of domestic market in
As aforesaid, operator usually provides multi-language version of instant message software to meet different needs of user. Users in Mainland
D. Analysis of Definition of Relevant Market by the Author
The Author considers, the definition of Relevant Market is the premise to see if an enterprise has dominant market position or not. But there is uncertain risk lies in definition of Relevant Market. As for one Antimonopoly Case, it may be different conclusion between legal Institution of Anti-monopolization and Courts. And it is same among Courts. Theory of Anti-monopoly as well as judicial practice in
Since Tencent QQ provides free service to User, User pays for "hidden" price including tolerance for instability as well as pop-up ads. And it is hard to quantify. Thus Non-price factors take precedence over the price factors. Moreover, there are discrepant issues in Instant Message product. Thus, the Author considers the SSNIP testing may not be the most effective way.
Firstly, Analysis on the Definition of Commodity Market
The Author could go along with it most of the way which GDHC defines Instant Message (IM) tools and services such as Tencent QQ, Aliwangwang, MSN, Fetion, Skype and YY voice as the Relevant Commodity Market. However, the Author has reservations for putting Micro blog and social networks into the said relevant Commodity Market, as GDHC’s view.
When defining an IM application software market, it should be taken into account of both factors of hardware and operating systems, or so called “platform”. In the ruling of merger case of the Skype/Microsoft, the European Commission's competition commission did not include social networks or Micro Blog as substitute for Instant Message product. On the contrary, the European Commission was considering the possibility that text message was interconnected with voice and video communication, and all existing in one Relevant Market in the near future.
It is not asymmetry of the substitutes among the three IM functionalities including text, voice and video. In regard of supply substitution, IM service vendors are going to provide three types of integrated function of IM product. From consumption preference, consumers are willing to choose integrated IM instead of single-function service by considering conveniences. At least at the moment, it is less likely for consumers to regard a social network or Micro blog only with text message as a perfect alternative for Tencent QQ IM services.
Secondly, Analysis on the Definition of Geographic Market
It is hard for the Author agrees with GDHC’s definition of a geographic market. Compared with the analysis on a Commodity Market, the analysis on a Geographic Market is not convincing.
Users are different due to the difference in geographic area, culture, habits as well as language. Chinese users usually do not browse websites in foreign language. Vice versa, most foreign users would not browse websites in Chinese. Even within the
Although users of Tencent QQ are all over the world, they are restricted by native language and culture. Geographic bounds are formed by language and cultural difference in communication. And language preference is quite hard to penetrate. Most of Tencent QQ's users speak Chinese, not preferring world language. And they usually communicate with each other in Chinese via Tencent QQ. Even there are some Tencent QQ users out of
If you follow the logic of the global nature of the Internet, a relevant geographic market could be defined as Global Market in almost all Anti-monopoly case of Internet. There are quite differences compared domestic markets with global markets. There would almost be no any enterprises could take a dominant position.
Legally there are territorial restrictions on IM networks. For example, the social network, Face Book is inaccessible in
Although there is no restriction on geographic boundary for IM networking services, it does not mean that the IM market is worldwide. The transmission range of physical technology cannot be a substitute for scope of geographic market.
As view of several international Anti-monopolies in Internet cases, there is only a few numbers of national courts to define the relevant geographic market as the global market.
II. Whether Tencent QQ Has Dominant Position in Market
A. As Qihoo’s view, Tencent QQ has a dominant position in market
Qihoo 360 believes that Tencent QQ has a dominant position in market for following reasons.
Firstly, Tencent QQ has the conditions of controlling transaction. The evidence is Tencent QQ can reduce product (service) quality, but without losing its users. It indicates that Tencent QQ can operate freely and disregard the threat of loss of users. That is the direct evidence of Tencent QQ has dominated position in Instant Messaging market,
Secondly, Tencent QQ can obstruct and disturb others to enter the relevant market. Since developing a series of additional competitive product and service portfolio is both expensive and time-consuming, but also requires quite numbers of users to form a network influence. Therefore, the leading position of Tencent QQ makes barrier for other competitors to enter and expand.
Thirdly, The interim report of Tencent QQ in the 2011 records: Active IM user accounts was 701.9 million on June 30, 2011, while Maximum peak on-line account users (quarterly) reach 136.7millions of instant message. As Annual Forecast of Tencent QQ in 2011 recorded: "With our unique cross-communication, SNS and social media in multi-platform social network, we continue to build leadership in whole social network industry in
Fourthly, as the "28th Internet Development Survey Report in
B. Tencent QQ denied they possess a dominant position in market
Firstly, The Relevant Market in this Case is much wider than the “instant messaging software & services market”defined by Qihoo 360. In this Case, the relevant geographic market should be the global market, while it is wrong of definition of the relevant geographic market by Qihoo 360.
Secondly, Tencent QQ does not possess a dominant position in the instant messaging service market. And the market share data provided by Qihoo 360 cannot be identified as fundamental evidence for share of Tencent QQ.
Thirdly, the product range of IResearch statistics is obviously less than relevant product range in the Case. Since IResearch’s monitoring on instant message software only focus on PC-end products, it did not contain mobile terminal and tablet PC products which are also known as mobile instant message software; Furthermore, Instant message services provided by SNS, e-mail, Micro blog and other products are also not included in the whole market of Instant Message products and services. The advisory report ignored a user may have a variety of instant message software and several IM accounts. The total rate of effective running time of Instant Messages software in the report is obviously inconsistent with sales targets and number of sales stipulated in the anti-monopoly law. In the advisory report, it proves that 76.2% of market share does not stand for market share specified in Anti-monopoly, but preference data of users of instant message software. Advisory Report identified 76.2% as "User preference share."
Fourthly, The investigation range in" Research Report on Instant Message User in China (2009)," issued by CNNIC, is apparently less than scope of the relevant market in this Case. Moreover the definition of user penetration does not meet provisions on market share in Anti-monopoly. Instant message software and services market is always open, easy to entry. And it is one of Internet products for very small barriers to entry and expansion hinder, a complete competitive market.
C. Identification of GDHC on whether Tencent QQ possesses dominant position in market
DGHC justifies that TENCENT QQ does not possess dominant position in market.
Firstly, Tencent QQ does not have ability to control commodity price, quantity or other trading terms.
