March 6, 2007 10:04 pm

Music industry group to sue Yahoo China

Some of the biggest names in the global recording industry have launched a lawsuit against the Chinese affiliate of Yahoo, the leading US internet portal, over alleged music piracy.

In a case led by industry group IFPI, companies including EMI, Sony BMG Music Entertainment, Warner Music and Universal Music are suing Yahoo China for about Rmb5.5m ($710,000) in damages – in spite of losing a similar case against Baidu.com, the Chinese internet search company, last year.

The move highlights the determination of record companies to pile legal pressure on internet companies globally that they believe are making their songs available to users without approval.

IFPI said it had decided to file the lawsuit, which is being heard by the same Beijing court that ruled for Baidu, because it was confident that its legal case was strong and it was unwilling to wait until the result of its appeal of the earlier ruling.

“We expect to eventually win,” John Kennedy, IFPI chairman, said yesterday. “We believe they are involved in infringing our members’ rights on a major scale.”

However, Alibaba.com, the leading Chinese online commerce group that owns Yahoo China, said the Baidu ruling last November set a precedent that showed that the music companies had “no case”.

IFPI’s complaint centres on Yahoo China's music search service, which allows users to easily find and listen to or download music available on the Chinese internet – the vast majority of which is pirated.

“Our view is that there is a clear precedent out there,” said Porter Erisman, Alibaba vice-president for corporate affairs. “Search companies can’t be held responsible for content held on third-party websites.”

Search companies could not be expected to screen the millions of pages of website content on the internet for copyright violations, Mr Erisman said.

Both IFPI and Alibaba said they had been discussing a settlement of the dispute up until the Baidu ruling was announced.

Mr Kennedy said the two sides had been close to signing a deal on co-operation between Yahoo China and the record companies that would have allowed legal downloads for Chinese internet users.

However, Mr Erisman said that, while Alibaba respected the goals of the IFPI and believed Chinese consumers were ready to pay for music, the music companies should not take in China the “very confrontational approach” they had adopted in western markets.

In January, EMI pulled out of the IFPI lawsuit against Nasdaq-listed Baidu, with the two companies agreeing instead create a new music service instead.

Under their new “strategic partnership” EMI and Baidu are to share revenues from the new advertising-supported free online music streaming service hosted on a special section of Baidu's website.

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