Case 7 Dispute over unfair-competition of “advertisement filter of web browser”
[Basic Information]
Case No.: (2017) Beijing 0105 Civil First Instance No. 70786
(2018) Beijing 73 Civil Final Instance No. 558
Plaintiff: Shenzhen Tencent Computer System Co., Ltd.
Defendant: Beijing World Xinghui Technology Co., Ltd.
[Case Brief]
The website of Tencent Video, operated by Shenzhen Tencent Computer System Co., Ltd. (hereinafter referred to as “Tencent”), provided online video viewing services to users; it purchased copyrights of film and television works and provided film and television works playing services by “watch for free + advertisement” and membership system. “TheWorld Browser”, developed and operated by Beijing World Xinghui Technology Co., Ltd. (hereinafter referred to as “World Xinghui”), had the function of “powerful blocking of page advertisements”; after checking such function in the setup, users may block advertisements at the beginning and during the pause of videos played on video websites. Tencent claimed that after using the advertisement blocking function of “TheWorld Browser” in the setup, users of the browser may effectively block advertisements at the beginning and during the pause of the films played on the website of Tencent Video. Such acts prohibited Tencent from gaining direct benefits from advertisements at the beginning and during the pause of the films played on the website; the advertisement-blocking act of Star World violated the principle of good faith and generally accepted commercial moral, and impaired the legitimate rights and interests of Tencent. Therefore, Tencent requested the court to order World Xinghui to compensate RMB 5 million yuan for economic loss and reasonable expenditure.
The court of the first instance held that the disputed browser with the function of filtering and blocking advertisements did not impose specific damages that were directly targeted without any evadable condition or option to the operation of Tencent. It was the practice and common business model of the browser industry to have the function of advertisement filter; under the option of “advertisement filter” of the browser, operators were equal in status, in needs as well as in opportunities of “interruption” to obtain benefits. Although uses of the advertisement blocking function of the browser by network users reduced the number of views of advertisements, yet such reduction did not constitute “actual damages” for legal remedy; it only impaired some of the competitor’s interests and affected the choice of some network users, and did not reach the specific degree to affect their survival, thus did not constitute a fundamental damage to the interests of Tencent. The disputed act of World Xinghui was insufficient to constitute the act of unfair competition. Accordingly, the court of first instance made a judgment to dismiss the claim of Tencent. Dissatisfied with the judgment, Tencent appealed. The court of second instance held that the operation of Tencent Video inevitably needed expenditure cost; Tencent was not obliged to provide videos to users free of charge where users did not pay any consideration, and its act of cost-recovering by advertisement belonged to legitimate business activities. Filter of video advertisement by the accused act made Tencent’s business activity of “watch for free + advertisement” cannot be presented according to wish, therefore, the accused act apparently belonged to acts of taking the initiative to directly interfere with and intervene in other’s operation. Although user’s needs shall be considered, yet reasonable users may change their current option if they were fully aware of the long-term consequences of such way that met current needs. Finally, for the long-term interests of consumers, the function of video advertisements filter may have an adverse effect. In conclusion, the accused act violated the generally accepted commercial moral, and the long-term existence of such act would obviously impair the social total welfare, therefore the accused act belonged to the activities prohibited by Article 2 of the Anti-Unfair Competition Law. Accordingly, the court of second instance revoked the first-instance judgment and ordered World Xinghui to compensate to Tencent RMB 1 million yuan for economic loss and RMB 890,000 yuan for counsel fees, economic analysis report fees and notarial fees.
[Comments]
The function of advertisement filter of internet browsers involved in this case was a representative act of unfair competition of Internet. Novelty of this case lies in that the court ordered the party involved to submit an economic analysis report against the accused act, which made the judgment under Article 2 of the Anti-Unfair Competition Law more objective. The judgment in the case was a response to the problem of competition order brought by the development of new technologies of the Internet, and had referential significance for the determination of violation of commercial moral by Internet competitive behavior and the influence on public interests therefrom.
photo from: 3g.163.com.
