A suit in which Tencent Holdings Ltd, China's largest Internet firm by market value, is suing Qihoo 360 Technology Co for damaging the brand and reputation of its Internet chatting tool QQ opened Tuesday.

Tencent claimed that Qihoo's action has hurt its business income and is demanding a 125 million-yuan (US$19.8 million) compensation, the Guangdong Province Higher People's Court heard yesterday.

Beijing-based Qihoo, the free Internet anti-virus tool provider, is suspected of misleading users with its computer security software called Koukou Guard that claims Tencent's QQ is scanning users' private data and information, an accusation that first emerged in 2010.

Tencent claimed Koukou Guard disabled and uninstalled dozens of value-added services that are bundled with QQ, and this action hurt its income.

Qihoo lawyers argued in the court yesterday that users are entitled to get rid of value-added plug-ins and its Koukou Guard is actually helping users and ensuring healthy market competition.

Tencent withdrew QQ, the nation's most popular online chatting tool, from 300 million users of Qihoo's anti-virus software, causing outrage among the users.