In January 2011 the Ministry of Industry and Information Technology of China (MIIT) released its Interim Measures on the Supervision and Administration of the Internet Information Service Market (Draft Seeking Opinions) (“Measures”). The Measures are a short document with a challenging task: to maintain fair and orderly competition in the Internet information service market while protecting the legitimate rights and interests of users. The Measures overlap with several other laws and regulations, including China’s Anti-Unfair Competition Law and its Telecommunications Regulations.

To those who witnessed the high-profile battle between Tencent and Qihoo, which reached its zenith in November 2010, it is clear that the Measures are MIIT’s direct answer to the problems facing China’s Internet information service market: problems that must be overcome if China’s Internet is to be competitive and robust.

The outcome of this clash of wills signals an increased level of government involvement in what will be an ongoing give-and-take between Internet companies and China’s legal and jurisdictional establishment. All businesses involved should be aware of developing issues and stay current with China’s evolving regulatory environment. This advisory provides a brief background on the dispute, details how MIIT has responded, and discusses some key issues and questions still facing Internet companies, as well as Internet users, in China.