Dispute Pits China's Top IM Client Against Security Firm

The Chinese company behind the country's most popular instant messaging client QQ has raised the ante in its feud with a domestic security firm.

On Wednesday, Tencent announced QQ users would need to uninstall software from Chinese security vendor 360 before being allowed to use the instant messaging client. The decision comes weeks after the two companies exchanged harsh accusations following 360's release of security software that claimed QQ was breaching user's privacy.

Tencent's QQ instant messaging client has more than 655 million active users, according to Beijing-based research firm Analysys International. The company controls 76 percent of the instant messaging client market and is one of the largest Internet companies in the country.

360, on the other hand, is a leading security vendor in China. The company claims that it has more than 300 million users of one of its security software clients. But this is not the first time the company has found itself in such controversies.

Baidu, China's largest search engine, filed a lawsuit against 360 in July, alleging that the security vendor was competing unfairly. The lawsuit claimed a version of the security vendor's software tagged both Baidu Toolbar and Baidu Address Bar as malware.

360 has also faced similar lawsuits from Yahoo China and other domestic companies in the past. But 360 has maintained that it is protecting users from security threats.

"360 is a security company. We want to make sure users have a safe environment to go online," said a 360 company spokesman. "On the issue of Tencent's QQ client, we hope they will correct their ways, and stop breaching user's privacy."

But the feud between the two companies has less to do with privacy issues, and more to do with unfair competition, said Zhao Wei, CEO of Chinese security company Knownsec. Both companies have gone too far, with Tencent attempting to monopolize the instant messaging market with its recent action, he added.

"You can't just do anything you want," Zhao said. "The market is a mess, but this current dispute is leading to a good outcome. Now people are starting to pay attention to these problems."

Tencent and 360 focus on different markets. But more and more Internet companies are finding themselves encroaching on other territories, said Mark Natkin, managing director of Beijing-based Marbridge Consulting. Natkin noted that Tencent, which also operates in online games, search, and e-commerce, has been rumored to be developing its own anti-virus software.

"The legal penalties have not grown large enough to be a sufficient deterrent," Natkin said of Chinese companies engaging in unfair competition.

Analysts expect Chinese authorities will want to get involved. But at this time, China's Ministry of Industry and Information Technology has no comment on the matter, said a ministry spokesman.

Tencent could not be reached for immediate comment. But in a message to QQ users, the company said it made a "very difficult decision" in regard to the matter, and that the instant messaging client does not monitor or breach user's privacy.

Users like Sun Yunhong, a college freshman at Liaoning University, however are not happy with Tencent's decision.

"As an Internet user I have my rights on what software I wish to use. Tencent doesn't have this authority," he said. "I don't have a good opinion about these two companies."

Both Tencent's QQ client and 360's security products are popular among Chinese users, Sun said. For the past five years, he has used QQ. At the same time, Sun noted 360 security software products are free.

"If I had to choose, I would give up 360, because I can pick from many different security vendors," he said. "In China, there's only one popular instant messaging client and that's QQ."

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