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Record labels sue China's top search engine

Three major record labels have launched court actions against three Chinese internet companies accusing them of building a business on copyright infringement. One of them is China's biggest search engine, Baidu.com.05 Feb 2008

Music trade body The International Federation of the Phonographic Industries (IFPI) said that it, Warner, Sony BMG and Universal have all filed suits against Baidu, Sohu and a company associated with it, Sogou.

The actions demand that the internet firms remove links from their services to copyright infringing material in which the three firms hold rights, the IFPI said. The cases have been filed with the Beijing No. 1 Intermediate People's Court, it said.

“The music industry in China wants partnership with the technology companies – but you cannot build partnership on the basis of systemic theft of copyrighted music and that is why we have been forced to take further actions," said John Kennedy, chief executive of the IFPI.Baidu's MP3 search facility

The companies are accused of providing links to copyright infringing material and earning advertising on the pages carrying those links. The IFPI said that Sogou was a particularly bad infringer.

"Sogou also actively induces and encourages copyright infringement by means of recommendations and charts," said an IFPI statement.

The labels contend that these kinds of services have recently been found to break the law in China. It said that a judgment of the Bejing Higher People's Court against Yahoo! China in December set a precedent which the others must follow.

The IFPI said that it believes that 99% of music files transferred in China are pirated, and that the legitimate music business is only worth $76 million.

“China’s internet companies have a unique opportunity to demonstrate respect for copyright, take a stand against piracy and engage in responsible partnership with music companies," said Kennedy. "It’s a matter of great regret that, despite the clear precedent laid down by the Yahoo! China judgment, those internet companies are instead choosing blatant violation of copyright, with the inevitable and unwanted litigation that follows in its wake.”

The companies are also taking further action against Yahoo! China, which they claim has not complied with the December ruling. They have filed execution proceedings asking the court to force Yahoo! China to comply with its order on the issue of links to copyrighted content. Yahoo! China is 44% owned by Yahoo!, which this week is the subject of a hostile takeover bid from Microsoft.