IFPI puts pressure in Yahoo’s China services

December 2007


The International Federation Of The Phonographic Industry has called on US based Yahoo! Inc to step in and stop Yahoo! China from infringing the copyrights of its members. The call came as Yahoo! China went to court in Beijing in a bid to fight the IFPI’s legal action against its MP3 search service. The IFPI has been in legal dispute with both Yahoo! China and its main competitor in the Chinese search engine market, Baidu.com, for some time over an MP3 search service they both offer which often takes users directly to illegal sources of music content. They claim that while Yahoo! China and Baidu do not actually host the illegal content, by providing such simple access to it they too are guilty of infringing their members’ copyrights. Both Yahoo! China and Baidu have been fighting the IFPI’s legal attempts to stop the MP3 search service, mainly because the service is so popular with their users. While the legal side of the dispute could, to be honest, go either way, the IFPI are hoping they have another route for bringing Yahoo! China inline – by putting pressure on Yahoo! Inc who own 44% of Alibaba Group, the Chinese company who in turn own Yahoo! China. The wider Yahoo! group won’t want to completely fall out with the record industry because they depend on good relationships with the record companies for their Yahoo! Music ventures.

The IFPI have also lobbied EU Trade Commissioner, Peter Mandelson, about “serious piracy and market access problems they face when trying to do business in China”. Adding that “ China has enormous promise for sales of music by European record companies” the IFPI point out that its market was worth only €56 million Euro in trade revenues last year. The record industry delegation will tell Commissioner Mandelson that this potential can only be realised if the huge problem of China’s internet piracy, estimated at over 99 per cent of the overall digital market, can be solved.  Physical piracy is estimated to be 85% of the overall physical market and the pirate market has an estimated value of €300 Million. Digital piracy is estimated to be over 99% of the overall digital market


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