Eleven global music giants have sued Yahoo! China, owned by e-commerce giant Alibaba, over its alleged involvement in illegal downloading and playing copyrighted music.
Led by industry group International Federation of the Phonographic Industry, companies, including EMI, Sony BMG Music Entertainment, Warner Music and Universal Music, are suing Yahoo! China for about 5.5 million yuan in damages.
"We expect to eventually win," IFPI Chairman John Kennedy said, adding "We believe they are involved in infringing our members' rights on a major scale."
Although a spokesman for Alibaba was quoted by China Daily that Yahoo! China only provides Web links in its music search results and should not be held responsible for contents of third-party websites.
In
November, another Chinese search engine, Baidu.com, won a similar lawsuit launched by IFPI but IFPI has said it is confident this time and is unwilling to wait until the result of its appeal against the Baidu ruling.
"Digital music contributes 20 to 30 per cent of the total revenue for Warner Music, Universal Music, Sony BMG Music and EMI in China every year, much higher than their world average of 10 per cent," one analyst said.
"And for some Chinese record companies, digital music accounts for around 50 per cent of the total revenue."
The popularity of digital music in China, he said, comes from the country's sluggish record sales, which is greatly affected by the prevalence of pirated CDs and a robust demand for mobile music such as ring tones and multimedia messaging service.