China's Baidu and Qihoo 360 sign pact meant to resolve dispute

Baidu last month filed a lawsuit against Qihoo 360 for alleged illegal use of its content

Chinese Internet giant Baidu and its rival Qihoo 360 signed an agreement on Thursday to compete fairly in China's search engine market, following a dispute between the two companies over search indexing.

The two companies, along with ten other Internet search providers, signed a "self-regulation pact" sponsored by the Internet Society of China, an industry trade group, which received support from Chinese government regulators for drafting the pact.

Qihoo 360's new search engine was launched in August and is now competing with Baidu's search services, which have long dominated the market with over 70 percent share.

A key section of the pact requires the Chinese Internet firms to abide by a robot exclusion protocol, a convention widely used by companies to prevent others from accessing certain parts or the entirety of a website.

Baidu alleges Qihoo 360's search engine has violated its robot exclusion protocol by indexing its Web pages, such as its encyclopedia and question-and-answer sites, without its permission.

To fight back, Baidu filed a lawsuit against Qihoo 360 last month, claiming that the company is illegally using and reproducing its content, and asking for 100 million yuan (US$15.9 million) in compensation. In its defense, Qihoo 360 has said it should be given access to Baidu's product pages, equating them to a public resource.

The pact signed by the two companies, however, is limited in scope and power. If a company is found in violation, the Internet Society of China will issue a warning and make a public condemnation in the media.

The agreement is more of a symbolic effort to tone down Baidu's dispute with Qihoo 360, which risked escalating, said Zhao Zhanling, an expert on China's information technology law.

The language in the pact does not side with Baidu or Qihoo 360 in their dispute, Zhao said. It states the Internet firms must observe the robot exclusion protocol, but also aims to ensure that the protocol is used to fairly promote the free flow of information.

"I think the pact is trying to find a balance," Zhao said. "The pact has no power backed by law, it's more about trying to get everyone on the same page."

Both Baidu and Qihoo 360 said they support the self-regulation pact.

"(It) has for the first time highlighted the critical role that the Robots protocol plays in regulating the Internet search industry, and its significance to the healthy development of the search sector," Baidu said in a statement.

Qihoo 360 said in an email, "We believe the agreement is positive for China's search market. The move will create a more open and fair competitive landscape, which will benefit the smaller guys over time."

The two companies declined to comment on the lawsuit.

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