Seven international companies, including the big four – Sony
BMG, Warner, Universal and EMI – lost a case in which they accused
Baidu of conducting illegal downloading and playing music owned by
the companies without permission.
The No. 1 Intermediate People's Court ruled in Baidu's favour,
saying that although the company provides links to music files,
there was no infringement by Baidu itself because the music files
are downloaded from a third party website.
The record companies had demanded compensation of $216,000 and a
public apology from Baidu, as well as a suspension of its download
service.
The recording industry body the International Federation of the
Phonographic Industry said that it would back the labels in an
appeal if they choose to appeal to a higher court.
"If the music companies had won, the whole search engine sector
would have ground to a halt," a Baidu spokesman told the Shanghai
Daily newspaper.
The case overturns an earlier ruling in EMI's favour, in which
Baidu was ordered to pay an EMI distributor $16,000 for
infringement.
Baidu operates sub-domains through which users can search for
music files, and the company is believed to receive 15% of all its
traffic on the mp3.baidu.com sub-domain.
Traditionally China has been the home of massive music and film
piracy but the Government says it is trying to eradicate the
problem. The IFPI is reported to have also begun proceedings
against China's second biggest search engine, Yahoo China. That
search engine is run by Alibaba, which is 40% owned by Yahoo.
