QIHOO 360 Technology Co must pay 5 million yuan(US$806,452) in compensation to Tencent for illicit competition, Guangdong Province Higher People's Court ruled today.
Under the ruling, the anti-virus software company must also publish apologies in major media outlets for 15 consecutive days.
However, chief judge Zhang Xuejun said there wasn't enough evidence to support Internet giant Tencent's claim for 125 million yuan in compensation.
Qihoo said today it would appeal to a higher court.
Both the defendant and the plaintiff were ordered pay part of the legal costs, the court said.
Tencent launched the suit in early 2012, after Qihoo launched software to block users from installing other value-added services related to Tencent's QQ online chatting tool.