A group of leading music companies is preparing to sue Yahoo China over complaints that the popular search engine violates copyrights by linking to Web sites that offer pirated music, the group’s chairman said.
The International Federation of the Phonographic Industry (IFPI) has complained for some time that search engines in China make it too easy for users to locate pirated music available for download online.
"Yahoo China has been blatantly infringing our members’ rights. We have started the process and as far as we are concerned we are on the track to litigation," said John Kennedy, chairman and chief executive of the music industry trade group the International Federation of the Phonographic Industry.
“If negotiation can prevent that, so be it,” We are taking the preliminary steps required by Chinese law for filing a lawsuit, he added.
IFPI says Yahoo China links to outside sites with unlicensed MP3 downloads of hundreds of songs. Yahoo China is a partnership between Internet giant Yahoo Inc, which owns 40 percent of the business, and China’s Alibaba.com. It is one of China’s most popular search engines, along with Baidu.com.
In a speech in Shanghai in May, Kennedy said China was the most exciting new market in the world for the music industry but that online piracy "threatens to strangle the fledgling legitimate digital music market before it has hardly evolved."
The IFPI estimates that about 85 percent of all music consumed in China is pirated.
Baidu.com has already been found guilty of copyright infringement in the Chinese courts; China Yahoo is now in a similar position, choosing to turn a blind eye to the infringements taking place on its service instead of setting the example of responsible practice which we would expect from them, Kennedy said in his speech.
"We are watching China Yahoo closely and will have no hesitation in acting to protect our members’ rights if we should have to," he said in the speech, according to a transcript.
IFPI could file its lawsuit within a few weeks, said Kennedy, who was in Beijing for meetings with government officials. The group represents more than 1,400 recording companies in 73 countries, including major US, European and Asian labels.
A spokesman for Yahoo China, Porter Erisman, said the search engine is acting "within the law."
We respect intellectual property rights, he said. "If someone sees something on our site that violates intellectual property rights, there is a process for removing it." Erisman said the company is talking with music companies about creating a licensed music download system for China.
Kennedy would not say how much money the lawsuit would ask for in damages. He said it also would request a court order to stop copyright infringement.
China is one of the world’s biggest sources of unlicensed copies of music, movies and software. But the government has been tightening enforcement under foreign pressure and to protect its own struggling music, movie and other creative industries, which say they face heavy losses from piracy.
The group is now making the necessary preparations to file a lawsuit against the company in China, confirmed Adrian Strain, a spokesman for the IFPI in the United Kingdom. He could not say immediately when the suit will be filed or what damages it will seek.
A new mainland law that took effect recently allows the government to fine online distributors of illegally copied music, movies or software.
Kennedy said the IFPI also is talking to Baidu.com about the search engine’s links to outside pirate Web sites but has not taken legal action.
Kennedy singled out Yahoo China and Chinese Internet search leader Baidu.com, which was ordered by a Beijing judge last year to stop directing users to music download sites.
Baidu.com responded to complaints last year by adding a disclaimer to its Web site saying it "fights piracy" and promises to remove links to sites that infringe copyrights. But the site continues to link to sites that the IFPI says offer unlicensed downloads.
The music industry has relied on an anti-piracy strategy of lawsuits against illegal music services and their users paired with growth in legal music services like Apple’s market-leading iTunes Music Store. Just this week, the British Phonographic Industry filed a lawsuit against AllofMP3.com, based in Russia, accusing it of selling music to customers without the permission of the copyright owners.
The IFPI helps fight music piracy worldwide on behalf of its 1,450 members, which include major and independent record labels in 70 countries. Along with other groups, including the Recording Industry Association of America, it has sued individual file sharers as well as sites that help users find digital music files online.
Speaking in May at the International Forum on the Audio Visual Industry in Shanghai, Kennedy called China "the most exciting new market in the world" for the recording industry because of its potential for growth. But he said a "wholesale sustained attack" against music piracy is needed, and called for more help from ISPs in particular.
"It is clear that the ISPs are far from adequately supporting us today. I have been very disappointed in recent months to see some well-known brand names among the Internet companies blatantly infringing our members’ rights," Kennedy said.
The complaints come at time when Yahoo China also is defending itself against criticism by human rights activists for cooperating with the communist government’s efforts to censor the Internet.
Yahoo China officials could not immediately be reached for comment