Universal Music, Sony BMG, Warner Music and Hong Kong-based Gold Label Entertainment lodged the new suit Monday, asking a Beijing court to order Baidu and Sohu to remove links to thousands of sites that carry pirated music.
A previous case against Baidu was unsuccessful, however the record companies believe recent changes to Chinese copyright law gives them a much stronger case this time. Yahoo China has been found guilty of copyright infringement under the new laws.
The success of Baidu has been credited to its index of music which is available from its front page, something Google has been unable to compete with until now (Google does not offer music search in China). Word leaked earlier today that Google had entered a joint venture with Top100.cn to offer free and legal music in China (details here) later this month.
The NASDAQ listed Baidu remains China’s largest internet company, but the site has been hit harder than many since the sharemarket turned late last year. From a high of $407.70 in November 2007, the stock closed at $230 a share today, down by a whopping 43.6%. Baidu shares fell 2.17% to $225 a share in after market trading.