The corporate war between Tencent and Qihoo underlines the frontier nature of Chinese business, and the weakness of the government and competition laws.
Millions of Chinese web users have been caught in the spat between Tencent – the company behind QQ instant messaging – and Qihoo, which makes 360 anti-virus software.
MIIT and public security officials have called on both sides to take a step back, but so far the two companies remain at loggerheads.
The dispute reached crisis point last Thursday when Tencent, which has 655 million users, blocked access to its service to all users running 360 anti-virus.
It began two months ago when 360, which claims 70% of China’s anti-virus market, accused QQ of accessing the private data of its users and issued a plug-in to users. QQ has denied it has stolen any user private data.
Qihoo CEO Zhou Hongyi told theSouthern Metropolitan Daily newspaper today that the government officials had called on the companies to not compel users in any way, but Tencent was still blocking 360 users.
Analysts say both companies will be hit by the fallout from the dispute, although online polls suggest Tencent is taking more of the blame.
Of 423,000 who took part in a 163.com survey, 66% voted to remove Tencent’s software, while 34% chose Qihoo 360, WSJ reported.
In a sina.compoll, 53.8% voted against QQ and 24.2% against 360.