Industry body the International Federation of the Phonographic Industry (IFPI) has begun legal proceedings against the search and portal company in the Chinese courts after asking the company to take the action last April. The IFPI represents all the major music labels, including EMI, Sony-BMG and Warner Music.
"Yahoo! China has been blatantly infringing our members’ rights," said IFPI chief executive John Kennedy. "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."
The case will claim that by providing links to sites hosting copyright infringing music downloads, Yahoo! China is acting illegally. IFPI has already taken similar action against ISP Baidu.
"Yahoo! China is an mp3 link site which is infringing IFPI member companies' rights on a large scale by making available copyrighted songs for download from its service without any permission from the record companies," said an IFPI statement.
"In April 2006 IFPI wrote to Yahoo! China on behalf of its member record companies, asking it to take the necessary steps to stop the infringement of IFPI members' rights. To date IFPI has received no acceptable response. IFPI is taking the preliminary steps required by Chinese law for filing a lawsuit," said the statement.
Yahoo! told OUT-LAW that Yahoo! China is operated and managed by Alibaba.com. No one at Alibaba was available for comment before going to press.
Speaking at the China International Forum on the Audio Visual Industry in Shanghai in June, IFPI's Kennedy said that 90% of recordings in China infringe copyright, and that the illegal music market there is worth £216 million.
At that event he seemed to signpost this week's action. "I have been very disappointed in recent months to see some well-known brand names among the internet companies blatantly infringing our members' rights," he said. "Baidu 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."
"We are watching China-Yahoo! closely and will have no hesitating in acting to protect our members' rights if we should have to," he said.
Kennedy told Bloomberg News that he was not sure what damages the IFPI would look for in the courts, but that if the case were in the US they "would certainly run into tens of millions and perhaps even more than that".
