ALB: Can you talk about how you have grown with Qihoo 360?

I joined Qihoo 360 in September 2010, when there were altogether three staff, including me and the then GC. When I first joined the company, I felt it had a very different ethos. Everyone was busy. The lights were always on in the Sihui offices. As an internet start-up, Qihoo 360 had a weak foundation in legal affairs and faced an increasing number of lawsuits. I had handled lawsuits before, but far fewer and much less complicated. I sorted through contracts and licenses, and worked on a large number of lawsuits and complaints. At the same time, I followed legal work in relation to the company’s U.S. listing. It was very difficult to recruit the right people.

Back then, the company faced a number of problems. I joined the company when the “3Q war” started. The company was also involved in court lawsuits against Kingsoft and Rising. In addition, there was police intervention during the IPO period. At the time, our president asked me to set up communications channels with police departments. For some time, I visited different police departments to report to and communicate with them. Later, I became a visiting professor at the People’s Public Security University of China and gave lectures on Internet security and laws at police officer workshops. Such good communications have helped facilitate mutual understanding and support between the company and the police.

ALB: Of so many lawsuits at Qihoo 360, which impresses you most?

The anti-monopoly case, in which Qihoo 360 sued Tencent, impresses me most. This case left an indelible mark on the Internet history. Laws are rules formulated by some people and executed by others to balance interests between different parties. So is the anti-monopoly law. The final court ruling did not support Qihoo 360’s claim, but over the course of the trial, the Internet industry, economic and legal academics, and even legislative and judiciary departments had different views on the case. The outcome of a case cannot be isolated from its background. The ruling on the case is the outcome of interactions between different interests at a particular historic moment.

I believe this case has far-reaching implications. In the early days of the Internet, creative products could be copied easily. But now, for many small and micro-innovative companies, their products or businesses are increasingly being acquired. In this sense, that lawsuit has helped the competitive landscape in the Chinese internet industry become more regulated.

ALB: What are your standards for selecting lawyers?

I am very familiar with the legal industry. We have worked with ten law firms, including Zhong Lun, JunHe, King & Wood Mallesons, Fangda, Commerce & Finance, Llinks, Deheng and DHH. Our selection criteria include familiarity with Internet philosophy, professional expertise, understanding of our business model, and communication skills. Depending on the cases, we assess and hire lawyers based on their overall ability such as court performance and skill in communicating with judges. During the cooperation process, we continuously optimise and adapt ourselves to meet the changing needs of the company. In many cases, the professional staff of our team attends the trial together with the lawyers. This can improve team capability and reduce attorney fees.

Due to fierce and vicious competition and frequent frictions, the Internet industry has high demand for good litigation lawyers.

ALB: What kind of consensus has been reached among Chinese Internet companies after the 3Q war? What’s the significance?

As far as the 3Q war is concerned, the process is far more important than the outcome. The “3Q war” prompts Chinese Internet companies to reach a consensus on some matters. For example, different Internet platforms are actually similar in terms of business models, i.e. platforms usually offer free services for ordinary users but charge advertisers and other application service providers. Competition in the industry is actually competition between different Internet platforms. To evaluate the competitive behavior of a business, you need to measure the benefits it brings to Internet users as well as whether its improvement on the overall competitive landscape outweighs the losses to its rivals. The “3Q war” helped improve the ecosystem of the Chinese Internet industry as well as the competitive landscape of the market. It also helped enhance the well-being of consumers.

The 3Q war also played a positive role in promoting the development of the Internet and building up the rule of law. Specifically, the unfair competition case has attracted wide attention on the issue of privacy protection for Internet users and forced Chinese Internet platforms to become more open. The anti-monopoly case has helped promote China’s anti-monopoly law and became a milestone in the country’s anti-monopoly history. As a sword of Damocles hanging over the Internet companies, the anti-monopoly law is set to play a greater role in the future.

ALB: You once said that “monopoly leads to ‘desertification’ in the Chinese Internet industry.” Why? How can it be solved?

I come to the conclusion based on my observation of the competitive ecosystem in China’s Internet industry. After undergoing three booms, the industry has evolved from the stage of free competition to the stage of monopolistic competition. In contrast to the Chinese Internet market, which has long been in an oligopolistic pattern, the U.S. market sees Internet companies like Google, Facebook, Twitter and YouTube emerging every two years on average. According to third-party statistics, no new influential website or company has emerged in the Chinese market since 2006, while the US Internet industry produced a bunch of new innovative companies like Facebook during the same period. China’s Internet market has changed from thriving along with the U.S. market to becoming “desertified.”

Only by introducing competition to break monopoly can we promote the healthy development of the Internet industry as an innovative business. Just as Zhou Qiren, a professor at Peking University, said at the inaugural China Competition Policy Forum: “Two monsters dancing together is more interesting than an angel dancing alone.”

ALB: People have different opinions about Qihoo 360, including a persistent view that the company is involved in too many lawsuits. What are your thoughts on this? Do you have any grievances?

It is very normal for an Internet company to be involved in a number of lawsuits. It is a sign of its strong awareness of the rule of law. Litigation helps protect the legitimate interests of companies. Statistics show that between 2010 and June 2015, Qihoo 360 was involved in a total of 422 lawsuits. Of these cases, Qihoo 360 won 328 and lost 36, with the remaining 58 still pending. Litigation effectively protects our legitimate interests.
We do have grievance. Media is too powerful. In particular, those who control the media are really too powerful. If you don’t looking at these data, you may also feel that Qihoo 360 loses more than it wins. People’s views about Qihoo 360’s litigation are advertised by others. So this is a very strange phenomenon. Our products are highly recognised by users, but some of the views about Qihoo 360 are misleading. I can only say that truth may not be what you’ve heard or seen.

ALB: As far as your department is concerned, what are your plans for Qihoo 360?

Qihoo 360 is diversifying its product lines and exploring new areas such as smart hardware and Internet finance. The company is set to face more legal issues regarding intellectual property rights, compliance and operation, and risk control that are brought about by the new business models in these areas. We have set up a team well-poised to deal with these issues.

Litigations will occur as long as there is competition. The fiercer the competition, the more varied the litigations. How to effectively control and handle disputes will be an important endeavour for us in the future. As the Chinese public becomes more aware of IP rights, it is increasingly important for the company to protect its IP rights, trademark, patents and copyrights. With the development of the Internet economy, the rule of law and policy construction relating to the Internet are also being pushed forward rapidly. Various regulations, rules and policies are being formulated. Qihoo 360 should be actively involved in this work.