Institute for Internet Policy & Law @ Beijing Normal University

What is the most sensational ICT news in China this week? Of course, it is the War between two animals–Penguin representing Tencent and  Tiger for Qihoo. After sending its 0.6 billion Chinese IM users a “Public Condemnation against Qihoo 360′” via pop-up windows, Tencent, which has been using the logo of two cute-looking penguins, publicly announced that it stops inter-operating with Qihoo’s 360’s newly released security program, Kou Kou Bodyguard. Tencent condemned Qihoo (Chinese name “Magical Tiger”) for hijacking users’ accounts through striping ads attached to QQ and redirecting QQ users to 360 browers. Qihoo that developed from an anti-virus company to the second large security and online assistance program service provider to 0.5 billion Chinese users denied the allegation that Kou Kou Bodyguard was a Trojan program to steal users’ information but has removed the program offline.

The War between  two leading Internet companies have devastated many Internet users, particularly who  had solely relied on these domestic services on IM, chatting, searching and email, etc. Under Tencent’s unilateral announcement, any user who has Qihoo 360 installed on the computer will not be able to login Tencent’s popular IM program QQ. Tencent has sued Qihoo for unfair competition and other claims to Beijing Court. Meanwhile, angry QQ users (especially those who paid fees to Tencent) have gather to bring collective action against Tencent. Ministry of Industry and Information Technology and Ministry of Public Security have summoned both parties for investigation.

For more information, please refer to “QQ-360 Battle Escalates into War” on WSJ.

The case shows the poor legal protection on privacy and personal information for more than 1 billion Internet users in China. It is widely believed that Internet giants are all blatantly detecting, collecting and trading their users’ privacy information for profit. In this case, tens of million of users become the virtual hostage of commercial strategy. Internet companies’ tremendous technical capacity can be a threat of the users’ choice and legitimate interest.

How would Tencent implement its anti-360 campaign? How did it detect and verify whether a user has uninstall Qihoo 360 or not? The answer is that Tencent’s widely used IM client integrates QQ Housekeep (formerly named QQ Doctor) that can automatically scan users’ drive and detect the files and programs installed on users’ computers.  Qihoo 360 had labelled QQ Doctor as a privacy-infringement program but Tencent rebutted that 360 lied for fear of competition in security product market.

In addition, malice competition actions not only directly hurt the consumers but potentially endanger the network security and stability. Civil disputes may deteriorate into cyber-crimes. Common use of cloud computing gives Internet giants “invisible hand” to manipulate, control and imperil billion’s of users. When data, computer and usage are more beyond the control of users, we have good reason to worry who is really in control.

The competent governmental agency, MIIT, finally stepped in the dispute. In an official announcement made on November 21,  both parties were condemned for acts of unfair competition and bad social impacts. Both were required to stop any acts that may damage the legitimate interests of users, stop mutual attacks and apologize to the users. The announcement also asked both to take appropriate make-up measures.  Interestingly, MIIT ordered both to carefully learn relevant laws and regulations and improve their moral construction. Let alone the morality standards that are apparently in doubt, people may wonder what kind of laws and regulations they should “carefully learn”. Obviously, there has no law or regulation to touch a commercial operator’s proactive or aggressive self-defensive actions.

CIETAC Presiding Arbitrators’ Seminar was held on November 5-6 in Beijing East Garden International Conference Center. Around 50 academic, lawyers, in-house counsels and CIETAC staff took the shuttle bus and headed to the lakeside villa at the sunny noon of Friday.

This is the first seminar organized by CIETAC to brainstorm Presiding Arbitrators. Unlike ad hoc arbitration that is widely adopted around the world, Chinese Arbitration Law only allows for institutional arbitration.  The state-sanctioned institutions should guarantee the quality of arbitral awards. Presiding arbitrators are primarily responsible for fair and reasonable decisions. CIETAC has been emphasizing the responsibility and accountability in arbitral proceedings.

A couple of issues was discussed and hotly debated. For example, a couple of senior arbitrators (in their 70s or 80s) mentioned the divergence of international arbitration and domestic arbitration, which has always been a Chinese characteristic. However, after China becomes a WTO Member and complies with the National Treatment principle, it does not make much sense to segregate proceedings based on arbitrary judgment on “overseas” factors. There are more Chinese companies making Overseas Director Investment to other countries. It would be more controversial to draw the line.

There are other interesting discussions, such as how to handle the case when a persistent presiding arbitrator refuses to consult the co-arbitrators, how to define the relation among “arbitraral court, “expert advisory commitment” and Arbitration Commitment, etc.

UNESCAP and UNECE jointly launched the The United Nations Network of Experts for Paperless Trade in Asia and the Pacific (UNNExT) to promote implementation of Single Window and paperless trade.Prof. Hong Xue was the only Chinese and the only legal expert in the group. Prof. Xue is tasked to draft a Regional Agreement on Electronic Exchange of Trade Data and Documents.

UNNExT aims to assist local experts of the region to adopt global standards and solutions for trade document and data requirement simplification and harmonization, as well as to support national, subregional and transcontinental Single Window initiatives in the Asia-Pacific region for trade facilitation.

The first Conference was held in Swiss Garden Hotel, Kuala Lumpur on October 4, 2010, followed with Asia-Pacific Trade Facilitation Forum 2010: “Trade Facilitation for Regional Connectivity: Advancing Paperless Trade” on October 5-6. Prof. Xue presented the analytical study of the draft Agreement to government officials, traders and public and private service providers from Central Asia, South, Southeast and East Asia as well as the South Pacific.

Advisory Group on Legal Framework for National and Regional Single Window has been established in March 1, 2011. Prof. Xue is the only member in the Group from UNNeXT.

After 13 years’ discussion and drafting, Antitrust Law is finally approved by the NPC. The Law targets at three antitrust acts: monopoly agreement, abusive market domination and anti-competition concentration of operators.

The Law obviously compromises on many key issues:

1. There is only one provision against abuse of intellectual property rights, which will not have substantive effect on present disputes.

2. Administrative monopoly is barely tackled.

3. The enforcement system is also strongly attacked. No centralized enforcement is established. The Antitrust Commission of the State Council is only a coordinating body.

http://news.sina.com.cn/c/2007-08-31/050713783631.shtml

After promulgation of the Property Law, the draft of the Torts Law has been published. Protection of privacy will be formally established.

http://news.sina.com.cn/c/l/2007-06-12/065213207904.shtml