Baidu Removed From U.S. ‘Notorious Markets’ Piracy List After Music Pact

Baidu Inc.’s settlement with record companies this year was rewarded by the U.S. government’s decision to remove it from a list of “notorious markets” that help sustain piracy and counterfeiting of intellectual property.

Baidu, China’s biggest Internet search engine, agreed in July with Universal Music Group, Warner Music Group Corp. (WMG) and Sony Corp. (6758) to pay owners of copyrighted material on a social- music platform, a deal cited by the U.S. Trade Representative yesterday in its report. The Ladies Market in Hong Kong, where customs officials acted to remove infringing goods, and the Savelovskiy Market in Moscow, where managers have stepped in to stop such sales, were also dropped from the list.

Alibaba Group Holding Ltd.’s Taobao, China’s biggest online retailer, remained among more than 30 online and physical markets worldwide identified in the report for helping the illegal sale of material protected by copyright or patents. Others include the Pirate Bay file-sharing website in Sweden and the Silk Street Market in Beijing, according to the report.

“The notorious markets highlighted in this review negatively impact legitimate businesses and industries of all sizes that rely on intellectual property to protect their goods and services,” U.S. Trade Representative Ron Kirk said yesterday in a statement. “We hope that this review will continue to yield the kind of concrete action from highlighted markets that led to the removal of several markets from the list this year.”

The trade office said in the report that the markets were identified according to information submitted in response to a September request for comments.

‘Rogue Websites’

The U.S. urged regulators overseeing the listed markets to step up efforts to combat violations.

The list “demonstrates the need for Congress to take action against rogue websites that are causing so much damage to American workers and businesses,” Michael O’Leary, senior executive vice president for global policy and external affairs at the Motion Picture Association of America, said in an e- mailed statement.

Bills under consideration in the U.S. Congress would target non-U.S. websites that distribute pirated digital content and counterfeit goods. The measures would let the Justice Department seek court orders forcing U.S.-based Internet-service providers, search engines, payment services and advertising networks to block or stop business with such sites.

The legislation is backed by the U.S. movie and music industries, which want stronger protection against piracy, and opposed by Internet executives, including Google Inc. co-founder Sergey Brin, who say the bills would threaten the technology industry and lead to online censorship.

‘Unauthorized Content’

Pirate Bay, the largest file-sharing site using BitTorrent software, “continues to facilitate the download of unauthorized content,” according to the report.

The site, based in Sweden, has said users contribute content to share with others and that there is no copyrighted material on the network.

Pirate Bay’s four founders were sentenced to one year in prison each in April 2009 by a Swedish court. Three of the men had their jail sentences reduced on appeal in November 2010.

While Taobao has made “significant efforts” to address pirated and counterfeit goods, “much remains to be done,” according to the report.

Phone calls placed to the Chinese embassy in Washington seeking comment on the report weren’t answered.

To contact the reporter on this story: Eric Martin in Washington at emartin21@bloomberg.net

To contact the editor responsible for this story: Steve Geimann at sgeimann@bloomberg.net

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