The database involved is used for inputting Chinese characters for internet searches known as an IME and is used by Sohu's search site Sogou.
Google has issued a public apology both on its blog and in a letter to Reuters admitting "leveraging some non-Google database resources" while promising to take immediate action.
However, Sohu, which sent a letter to Google, said the apology is not acceptable since it didn't directly admit to using Sogou's technology and has set up a section on their website detailing the evidence against Google. It has threatened legal action if the problem is not fully addressed.
William Moss, a senior manager at Burson Marsteller and technology blogger, says the accusation is particularly damaging as it threatens the image of Google as an innovator. "Google's reputation for engineering prowess is valuable, and it has to be very careful about anything that could damage it," he said.
"The IME isn't part of the search engine, but it still has the Google name on it, and that means it has to take this very seriously."
He advised that Google be transparent about its reaction, "demonstrating the quality of their work in the long run" he added.
According to iResearch, Google has a search market share of 22 per cent in China.
