Yahoo!’s legal departments are not having a good run at the moment. Not only are they dealing with click fraud lawsuits in the United States and information demands from Chinese censorship authorities, it also looks like they’ll soon face a lawsuit that major music companies are planning against Yahoo! China.
The music industry trade group, International Federation of the Phonographic Industry (IFPI), is preparing to sue Yahoo! China for copyright infringement. The lawsuit forms part of the IFPI’s efforts to combat music piracy in China.
While the music industry regards China as an exciting emerging market, piracy is a huge problem. According to the IFPI’s estimates, pirated music accounts for about 85% of all music currently consumed in China.
Search engines play a central part in directing Chinese Internet users to illegal music download sites, and users searching for music downloads account for a significant share of search engine traffic. Market leading Chinese search engine Baidu.com used to even let users download songs directly from Baidu’s MP3 search results pages, but was forced to stop this practice in October 2005 after being sued by music companies.
John Kennedy, the chairman and CEO of the IFPI, seems keen and ready to do battle with Yahoo! China in court: “Yahoo China has been blatantly infringing our members’ rights. We have started the process and as far as we’re concerned we’re on the track to litigation. If negotiation can prevent that, so be it.”