A Chinese court has ruled against Yahoo's China operations in a copyright infringement lawsuit filed by member companies of the IFPI (International Federation of the Phonographic Industry).
John Kennedy, the IFPI's chairman and CEO, called the ruling, which was made on Tuesday, "a good news day for the music industry," in a written statement.
"This judgement will boost the growth of a licensed digital music business in China and provide better protection for intellectual property in this vast, exciting market. The ruling promises to improve the whole environment in which the local and international music industry does business in China," Kennedy said.
Yahoo didn't immediately respond to a request for comment.
Eleven IFPI member companies filed suit in the Beijing No. 2 Intermediate Court, seeking 5.5 million Chinese yuan ($710,000) in damages. On Tuesday, state news agency Xinhua reported that the Chinese court had found Yahoo China guilty of copyright infringement and ordered it to pay 210,000 yuan ($27,000) in damages. The court also told Yahoo China to delete the offending links to the free download sites.
The IFPI alleged that Yahoo China infringed IFPI members' copyrights by making copyrighted songs available for download without permission, an IFPI spokesman said. The IFPI specifically objected to a Yahoo China music search engine that the IFPI charged "induces and facilitates" the search of music tracks and their subsequent playback or download for free from within Yahoo China's Web site, the spokesman said.
In March, Alibaba.com, which operates Yahoo China, had expressed confidence it would win, saying that the courts in China had established that search engine operators are not liable for content posted on third-party Web sites. In a similar case last year, the Chinese search engine Baidu.com wasn't found liable for copyright violations. That case was also brought by IFPI, according to Xinhua.
"The Beijing Court has confirmed that Yahoo China has clear responsibility for removing all links to the infringing tracks on its service," IFPI's Kennedy said in the statement. "Because this is a judgment made under new regulations in China, today's judgment supersedes the previous decision on Baidu and confirms the responsibility of all similar music search providers in China."
The ruling will allow IFPI members to demand the removal of infringing links from all music search services in China, Kennedy said. "The court has effectively called time on this type of mass digital piracy in China. Now we must see that this ruling is respected by all those who seek to profit from providing access to music online in this way," Kennedy said.
The IFPI represents the interests of its 1,400 music industry member companies in more than 70 countries worldwide, including Sony BMG Music Entertainment, Universal Music Group, and Warner Music Group, three of the record companies involved in the Yahoo China lawsuit.