“TheWorld Browser” was developed by its operator Beijing World Xinghui Technology Co., Ltd.(hereinafter referred to as “World Xinghui”). It is featured with the “advertisements blocking” function, with which checked, the browser users can navigate the video website of Tencent with all ads that are to be played at the beginning and/or the middle of the videos blocked. Entrusted by Tencent, Unitalen Attorneys at Law appealed to Beijing IP Court of the second instance and won the case, as the court held clearly that – the navigator blocking the ads of the videos has not only violated the recognized business ethics, but also would cause noticeable damage to the overall social interest if it prevails for long, which is prohibited in Article 2 of the Anti-Unfair Competition Law.
Highlights of the Second-Instance Judgement
The court pointed out that, in accordance with the provisions in Article 16 of the "Interim Measures for the Administration of Internet Advertising" that “(cannot) provide or use applications, hardware, etc. to restrict, filter, cover, fast forward and put other restrictions on the legitimate advertisements provided by others”, it’s clear that the authority has identified the act of intercepting legitimate advertisements as a violation of recognized business ethics.
The first-instance judgement and the appellee had paid attention to the consumer interest limited to “the current stage” only. In respect of long-term interests, the alleged act could cause damage in the following 2 main areas:
First, as for now, the video websites might adjust their business model and it could affect the consumers;
Second, looking forward, the video websites might not survive, which will eventually affect the interests of the consumers.
The legitimacy of navigators blocking ads of videos has long been at discussion among the academic circle in recent years. A prevailing point is that competition behavior is naturally damaging, users have the right to choose whether to use the ad block function, and the development of ad filtering can promote technology advancement and benefit consumer interest, it’s argued that the evaluation of legitimacy of an act shall not be made without a dynamic view of competition and so on. The judgment made by the court of the second instance in this case has provided a definite and comprehensive judicial ruling on the analysis and evaluation of the legitimacy of ads filtering under the framework of the Anti-Unfair Competition Law. The determination of recognized business ethics, the verification made through quantitative analysis of the balance of interest in Economics, and the analysis of the competition results in line with the dynamic market environment will provide important guidance for the future similar cases.