Try the new FT.com

September 16, 2005 9:54 pm

Court raps Baidu over pirate music

  • Share
  • Print
  • Clip
  • Gift Article
  • Comments

A Beijing court on Friday ordered Baidu.com, China’s leading internet search engine, to pay compensation to a unit of global music group EMI over downloads of pirated pop music offered through its website.

The ruling highlights the potential legal vulnerability of the popular “MP3” digital music search service offered by Baidu, which enjoyed a hugely successful listing on the Nasdaq last month.

The financial impact on Baidu of the decision by Beijing’s Haidian People’s Court will be minimal, with compensation and costs totalling only around Rmb80,000, according to lawyers.

However, Baidu is likely to soon face a number of similar cases, including lawsuits raised by international entertainment companies EMI, Sony, Warner and Universal that are scheduled to open in Beijing on September 26.

"We welcome the ruling and it sets a good precedent for other court cases," said Chan Fai-hung, EMI Music's Southeast Asia vice president for new media.

"We discovered that search engines have been the biggest source for illegal music downloads in China in the past year,” Mr Chan said. “The ruling is therefore very significant for our industry.”

Officials at Baidu, which currently relies on its MP3 service for more than 20 per cent of traffic to its website, said it was unable to immediately comment on the court ruling. It has 15 days in which to appeal.

There has been heated debate around the world in recent years about how to manage digital copyright, with some internet search companies arguing they should not be held responsible for content accessed through their services.

Music and film companies have also been criticised for not making licensed content available on the internet, forcing online listeners to go to pirate services or “peer-to-peer” file-sharing networks.

Baidu’s MP3 search platform is relatively vulnerable to legal challenge, however. Instead of merely directing users to other websites it connects them directly to music files, allowing them to easily and freely download and listen to a huge number of pirated songs.

Last month Netease, one of China’s leading internet portals, suspended its similar online music search service over concerns about copyright piracy, a move that has helped to focus music industry attention on Baidu.

Baidu had noted the lawsuit by Shanghai Push in the prospectus issued ahead of its August IPO, which was given a rapturous welcome by Nasdaq investors.

The search company has also been targeted by Beijing New Picture Distribution over alleged piracy of the martial arts drama The House of Flying Daggers.

Baidu shares have been very actively traded since the IPO, including a first-day surge from the IPO price of US$27 to over US$150. In the last week they rose 36 per cent before falling after analysts at two investment banks that managed its IPO said it was overvalued.

Related Topics

Copyright The Financial Times Limited 2017. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.

  • Share
  • Print
  • Clip
  • Gift Article
  • Comments

NEWS BY EMAIL

Sign up for email briefings to stay up to date on topics you are interested in

SHARE THIS QUOTE