3 music groups sue Baidu for copyright dispute

Vivendi SA, Sony Corp and Warner Music Group Corp are seeking record damages from Baidu.com Inc on claims the operator of China's most-used Internet search site infringed copyright by offering Web links to pirated music.

The lawsuit filed by the International Federation of the Phonographic Industry in February was accepted by the Beijing No 1 Intermediate People's Court earlier this month, allowing the claims to be publicized. The $9 million in damages sought from Baidu and $7.5 million from Sohu.com Inc are the most asked for by record companies in China, May-Seey Leong, the federation's Asia regional director, says in a telephone interview.

Baidu, which controls 60 percent of the Chinese search market, is the "biggest roadblock" to creating a market for legal digital music in China, says Lachie Rutherford, the industry group's Asia Pacific chairman. More than 99 percent of online music in China is pirated, according to the federation.

"Winning this case against Baidu would be the biggest step forward yet in creating a legal digital music market in China," Rutherford, Warner Music's Asia president, says in a phone interview. China is home to more Web users than the combined populations of the UK and Japan.

Linda Sun, a Beijing-based spokeswoman for Baidu, says she couldn't immediately comment. Erin Sheng, a Beijing-based spokeswoman for Sohu.com, wasn't immediately available for comment. Vivendi's Universal Music Group is the world's biggest recorded-music company, while Sony BMG Music Entertainment, a venture between Sony and Bertelsmann AG, is the second largest. Warner Music and EMI Group Ltd rank third and fourth, respectively.