In an action against an online portal for promoting the use of malicious software, the plaintiffs -- a grassroots anti-rogue software federation -- suffered a major blow on November 17 after a Beijing court ruled in favor of the defendants.

 

Dong Haiping, leader of the Beijing-based federation, accused Alibaba of forcing the installation of search software Yahoo!Assistant onto his computer when he visited the website of an Alibaba subsidiary, Yahoo!China, in August 2006. The software could not be completely uninstalled and Dong claimed this caused his hard drive to crash.

 

Malicious or rogue or hooligan software typically includes such things as pop-up advertisements, spyware (which can allow others to steal a user's personal information), trackware (which can allow others to find out where a user lives and works), and other software that could infect a user's computer with a virus.

 

Deciding in Alibaba's favor, the court ruled that Dong had failed to provide enough proof that it was in fact Yahoo!Assistant that damaged his hard drive.

 

This case was the first setback that Dong's federation suffered since its establishment on September 4, 2006.

 

Others soon followed.

 

On December 18, the federation lost its suits against Zhongsou.com, and against Oak Pacific Interactive, makers of Dudu Download Accelerator.

 

Ironically enough, when search engine operator Qihoo.com provided Internet users with instructions on how to uninstall the Yahoo toolbar -- because it was deemed malicious -- using its software, 360 Safeguard, Yahoo!China filed a lawsuit against Qihoo for unfair competition, claiming that Qihoo misled users and marred Yahoo!China's reputation in the process.

 

On December 20, the Beijing No. 2 Intermediate People's Court ruled in favor of Yahoo!China, and ordered Qihoo's operator, Beijing Sanjiwuxian Internet Technology, to stop its "unfair competitive practices" and to pay damages and costs.

 

Zhou Hongyi, chairman of Qihoo, said that the verdict demonstrates that hooligan software providers can make false counterclaims, and win.

 

Taking the fight to the US

 

These setbacks haven't weakened Dong's resolve to continue the campaign against rogue software makers and promoters.

 

"I will go to the US to open a second front for my cause, just like the Normandy Invasion started the European Theater in WWII," Dong told reporters in Beijing on January 11.

 

Dong pointed out that all of the federation's five lawsuits in 2006 failed for two reasons: insufficient proof and a lack of a legal basis.

 

According to Qihoo's lawyer, Yu Guofu, it is currently difficult to collect evidence to prove the harmfulness of hooligan software in China. Moreover, there is a lack of domestic legislation regulating this aspect of IT.

 

In November, the Internet Society of China developed a standard to categorize hooligan software. But it is only an industry regulation and not state-approved law, which means that it cannot serve as a legal basis for a claim.

 

"There is a good chance we will win the lawsuits in the US," Dong said. "Netizens who surf the Internet in Chinese in the US are also bothered by hooligan software. But the difference is that in the US, 18 states already have the relevant laws in place to punish hooligan software providers, and another 18 or more are thinking about doing so. This gives us a bigger hope for success."

 

Dong cited a recent case in the US that has fueled his confidence. In November, the US Federal Trade Commission (FTC) handed down a verdict against a company that provides Zango/180 Solutions adware, and ordered the company to pay a fine of US$3 million. The company reportedly tricked users into installing the adware, which cannot be removed. According to the FTC, the software was downloaded into more than 70 million computers in North America, and unwanted advertisements popped up on screens more than 6.9 billion times.

 

"The legal environment and the methods of evidence collection in the US are exemplary in Internet-related cases," Qihoo's lawyer Yu said, adding that under a different legal system, the final result could have been different. Countries like the US, the European Union, South Korea and Hungary have enacted laws to restrict hooligan and spy software, which can be used as legal references in China.

 

Dong further explained that because legal costs in the US are higher, his federation would be claiming for larger compensations. In addition, tactics will be modified in that rather than bringing a slew of claims against several rogue software providers at once, as was done in China, the federation will focus its claims on a select few in the US.

 

The federation is already in discussions with two US law firms and the first suit is likely to be filed within the next two weeks. The defendants have yet to be identified.

 

The question the industry is asking now is, "So what happens if they win?" Commenting on the impact that any successful claim in the US might have on the situation in China, Cao Lingxiang, spokesman for Jiangmin SciTech, an anti-virus software provider, said that it could provide a legal reference for the Chinese courts, and could go some way towards controlling the hooligan software force.

 

"Although we lost several lawsuits, the anti-hooligan software initiative has taken root. Some big Internet firms have restrained or even done away with the use of such software," Cao said.

 

Other changes have been even more significant. Oak Pacific Interactive, makers of the Dudu Download Accelerator software, closed the department in November; a Shanghai company, which provided the user interface called Excellent Little Secretary and relied on it to generate more than 10 million yuan of profits every year, modified its use of pop-up advertisements; Zhongsou.com also shut down its user interface department when it found out that the federation was about to take action.

 

However, standing firm against the federation is Yahoo!China. After winning three lawsuits -- two it launched for unfair competition against Qihoo and AhnLab, a South Korean anti-virus software provider, and one the defederation launched against Yahoo! China -- the company is determined to redeem the reputation of Yahoo! Assistant.

 

In the last two weeks, anti-virus software providers like Rising Corp., Kingsoft, and Jiangmin have reportedly received legal letters from Yahoo!China accusing them of having listed Yahoo!Assistant and Alibaba's Network Real Name software as rogue software.

 

But who are the real beneficiaries of the campaign?

 

As the federation's frontman, Dong bears the brunt of criticisms and dislike. Dong has also been blamed for having indirectly promoted the use of Qihoo's 360 Safeguard, a move that hasn't sat nicely with security software providers.

 

Qihoo could, therefore, be said to be one of the biggest beneficiaries of the anti-hooligan software campaign. Its 360 Safeguard was installed in more than 12 million computers over a period of just four months, and its user base is growing by about 3 million every month. As the same time, the fledging company, which was set up less than one and a half years ago, has garnered venture capital investment totaling US$50 million.

 

Riding on Qihoo's success is anti-virus software provider, Kaspersky, which has its program embedded in Qihoo's 360.

 

The rapid increase of 360 Safeguard has affected the market share of user-interface software makers and operators. Before 360 came along, Yahoo!Assistant had a market penetration of about 30 percent. Now, with examination from Qihoo, Rising, Kingsoft and Jiangmin, that has dropped to about 10 percent.

 

Yahoo!China did not confirm the figure.

 

Another point being debated is whether or not companies actually have the Internet users' interest at heart.

 

Analysts have said, "Anti-virus software providers are not happy to be surprised with a new big rival (referring to Kaspersky), therefore, they are not very active in the anti-hooligan software move."

 

Jiangmin's Cao disagrees.

 

"Anti-virus software providers hope to purify the Internet space in China, and Dong's federation has set an example. We will try our best to support him."

 

(21st Century Business Herald, translated by Yuan Fang for China.org.cn, January 18, 2007)