奇虎360诉腾讯QQ滥用市场支配地位案一审评析（四）
hindering factor in the development of the market as a whole. As above, Tencent does not possess a dominant position in the market. Refer to Iresearch’s monitoring, Tencent IM accounted for 76.2% of the share of the overall market in 2010 of
Thirdly, the relevant market has an intense competition. Instant message market is in highly competitive and instable state, with new technology, new business model appearing constantly. And there is no any evidence showing that any enterprise could control market in long-term. Even in the absence of the external force involvement, the market could be able to achieve full competition and self-improvement.
Fourthly, the financial and technical conditions of Tencent QQ do not have a fundamental ability to eliminate new competitors entering the market or expand capacity ability. It does not need much capital and technology for IM Field, and the product alternative is high. And network influence and the stability of user are insurmountable obstacles. For example, MSN had been the Instant Message tool with the largest market share in the domestic market. However, Tencent QQ continues to attract users by product features till surpass MSN. It proves that it is not insurmountable to exceed the network influence and stability of user.
D. The author‘s view on whether Tencent QQ possess dominate position in market
According to Article of 17,
The author agreed, neither Qihoo 360 presumes that Tencent QQ is taking a dominant position in the market, nor GDHC identify that Tencent QQ does not possess the dominant position in the market.
Firstly, Market share
Market share is an important, but not the only factor to identify dominant position in market. Therefore it cannot be concluded that Tencent QQ having dominant position only by holding more than 50% market shares in the IM market in Mainland
Tencent QQ has 700 million active users, and it can lock users by taking advantage of high cost resulting from the increase in transfer cost of existing installation base users. The value obtained by each user is tied to the number of the users of the same service, therefore, more people use Tencent QQ, the more value of Tencent QQ would become for the users, and the more reliance on Tencent QQ the users will have. This will become a positive feedback loop of "network effects".
Secondly, Market access
In terms of the difficulty in market access, it is quite difficult for other enterprises considering on technology, fund, patent, network effect, user lock-in and etc. And they would pay a big price even entering it. Confronting with these competitors, such as Tencent QQ, MSN, and China Mobile Fetion, Most of enterprises will stand in awe. Tencent QQ may prevent potential competitors from entering the market by making incompatibility of IM software with software of potential competitors. Tencent QQ had once been sued by a PICA vendor for anti-monopoly. In fact, the PICA vendor infringed the rights of Tencent QQ firstly. But the reason of PICA, is no IM service vendor could maintain the survival if its IM products are not compatible with Tencent QQ.
Thirdly, Unilateral market and multilateral market
Although Tencent QQ provides free services to consumers, actually it can charge other software vendors or advertisers, or also raise the prices based on its market position, seller platform and patent portfolio. Although it is free between Tencent QQ and its consumers, it is chargeable among Tencent QQ, other software vendors and advertisers. Tencent QQ can cover the charged market with the open free market by cross-subsidization between the two markets. Therefore, it apparently will be circumscribed to define a multilateral market with the framework of a unilateral market.
Fourthly, Network effects and barriers of user lock-in
It can be agreed that it is low of the threshold for the entry of Tele- communication market. However, it cannot say that network effects and user lock-in barriers can be easily surpassed after the entry into the communication market. Since GDHC defines the relevant geographic market as the global market, global market should be preserved as the first premise while analyzing network effects and user lock-in effects. Actually, in the global market, Tencent QQ has never been able to surpass MSN though it temporarily surpasses MSN in the domestic market in
Fifthly, it remains to be discussed of the conclusion for not having dominant position of Tencent QQ.
As a summary, it remains to be discussed of the conclusion for not possessing dominant position of Tencent QQ, based on the geographic market defined as global market by the GDHC.
III. Whether Tencent QQ's Bundling Products (Services) Constitutes Tie-in
A. Qihoo believes the binding behavior of Tencent QQ equals to tie-in sale
The behavior of Tencent QQ constitutes tied transaction. Tencent QQ bundled QQ software manager with Instant message software, and install QQ doctor in the name of upgrading QQ software manager. Thus Tencent QQ constitutes tie-in sale by violation of five terms of Article 17(1) in the Anti-monopoly law.
B. Tencent QQ denied that its Bundling was for tie-in sale
It does not constitute tie-in sale when installing QQ software management in package. Both of QQ software management & QQ software belong to the software for free installation and easy to uninstall. It does not prevent users from choosing other similar products, nor any damages caused as Qihoo 360 claimed. According to article 17 of "Anti-monopoly law", software upgrading does not belong to tie-in sale. This applies to “QQ software management" and "QQ doctor" upgrade to "QQ computer housekeeper.”
C. GDHC’s identification on whether the Bundling of Tencent QQ is Tie-in sale
GDHC recognizes that it cannot be established of the Bundling of Tencent QQ as Tie-in sale.
Firstly, First of all, Tencent QQ does not possess a dominant position in instant messaging market. Next, there is no limitation to the Tencent QQ user's choice. Tencent QQ provides users with QQ software services, not requiring the user must use QQ software management as the premise. On the contrary, it provides uninstalling function instead; again users must permit it before upgrading Tencent QQ software management and QQ doctor to QQ computer keeper. Tencent QQ has done its duty to notify users and give option of usage.
Secondly, related operation of Tencent QQ has the economic rationality. QQ software management with QQ software package installed as a product of function integration, is favorable for users to handle QQ better through the usage of auxiliary tools, and secure user’s account of QQ software; On the contrary, If Tencent QQ does not provide the security products with QQ instant message software, it might be harmful to QQ software performance or usage value.
Thirdly, related operation of Tencent QQ does not limit or exclude the competition effect. Neither Qihoo 360 have any evidence to prove that Tencent QQ software package leads to turn down of the market share of similar products of Qihoo 360, nor any other evidence to prove that the behavior restrict or exclude competition of other competitors within the same market.
Fourthly, Qihoo 360 does not provide any evidences to prove that Tencent QQ software package, QQ software keeper as well as QQ doctor upgraded to QQ computer keeper's operation, have caused or will cause damage to consumers.
D. Analysis of the Author on whether Bundling of Tencent QQ is a Tie-in sale.
The Author regards, it does not prohibit that network vendor has dominant position in market, but do not support such activities as tie-in sale by abusing its dominant position in market. In this case, both sides have the case of bundled products (services). But refer to "bundling" is a tie-in sale or not, there is no any definite explanation in Anti-monopoly law.
As the practices in the USA and the EU, a Tie-in sale is constituted by:
Firstly, Since the business operator who conducting tie-in sale takes a dominant position in the market, it may coextend its dominance in the tying-product market to the tied-product market; The business operator who conducting tie-in sale is able to monopolize the tied product market; The tying product and the tied product are separable, but not complementary to each other; and there is insufficient competition in the tied product market, and consumers are lack of options. The above four conditions shall be satisfied simultaneously and none is dispensable.
Secondly, Analysis on the Four Conditions of Tie-in Sale
It is still arguable for GDHC to judge that Tencent QQ does not have dominant position in market. But it will be another pair of shoes if the Supreme Court makes a ruling that Tencent QQ has a dominant position in market.
Whether Tencent QQ is capable of monopolizing the tied product market. This is relevant to above term hereof. If Tencent QQ does not have the dominant position in market, this condition is not satisfied. If Tencent QQ is presumed to have a dominant position in market and capable of bundling relevant software of video, music, news, games, email, security, etc. with brand, capital and technology, and extend its dominance in the Instant message market to the relevant market, it may squeeze the living space of existing network enterprises of video, music, news, games, email, security, etc., and raise the barrier to prevent potential competitors from entering the market.
For example, Windows operating systems once bundled Media Player, and it took the dominance in the operating system market. Then once a user buys a Windows operating system, it means he buys Media Player too. This makes a browser software vendor who competing with Media Player in an unfavorable position. And it is the reason of the competitor filed for lawsuit against Microsoft on Anti-monopoly. Therefore, Microsoft was subject to the sanction under the Anti-trust law of the U.S. as well as the Competition law of the EU.
Another in the Sun-Oracle merger case in 2009, after the acquisition of Sun, Oracle would become a company which could provide one-stop system service by integrating software and hardware, and could bundle a complete set of IT products for selling, which would constitute competition against HP, Dell, Cisco, SAP, etc. The EU authority worried that the merger of the two companies would damage the competition in the database market, thus opposed to the merger.
Thirdly, generally speaking, Tencent QQ IM service and Tencent QQ Doctor (Computer Manager) are not complementary to each other.
