Universal Music Sues Russia’s VKontakte Social Network on Piracy

Vivendi SA (VIV)’s Universal Music Group, Warner Music Group Corp. and Sony Music Entertainment filed lawsuits in Russia, claiming copyright violations by the country’s largest social network VKontakte.

The separate cases, filed in arbitration court in St. Petersburg, seek to force VKontakte, known as VK, to remove material of a “sample of artists” from its music service, which is “deliberately facilitating copyright piracy on a large scale,” the International Federation of the Phonographic Industry said in a statement.

VKontakte, founded by entrepreneur Pavel Durov in 2006 in St. Petersburg, became Russia’s largest social network in part by offering users the opportunity to upload music and videos posted by others. The service, now controlled by Russian billionaire Alisher Usmanov’s Internet holding, Mail.ru Group Ltd. (MAIL), says it’s been removing infringing content.

“VK’s music service, unlike others in Russia, is an unlicensed file-sharing service that is designed for copyright infringement on a large scale,” IFPI Chief Executive Officer Frances Moore said in the statement. “For the music industry to grow and prosper, it needs digital partners that are licensed.”

The lobbying group, which represents more than 1,300 companies, said VK has failed to make significant steps to end copyright infringements over the past months, according to its website statement.

Acoustic Prints

“For a long while, we’ve been successfully co-operating with copyright owners in deleting illegal content,” VKontakte spokesman Georgy Lobushkin said in message via the social network. “Long ago we implemented an ‘acoustic prints’ systems which allows us to delete new copies of illegal content automatically. So their claims are unclear to us.”

Services including YouTube, Yandex.Music, Ivi, Zvooq, Deezer, iTunes, MegaFon and others are licensed music services in Russia, according to IFPI. Spotify appointed a Russia country head as it prepares to start in the country, Vedomosti said this week.

VKontakte had 61 million Russian users in December versus 54 million at Mail.ru’s Odnoklassniki and 13 million at Facebook Inc., according to researcher ComScore.

Recorded music revenues rose almost 13 percent in Russia to the equivalent of $69 million last year, driven by growth of licensed digital services, according to IFPI. This was $0.50 per capita, compared with the European average of $8.40, it said.

To contact the reporter on this story: Ilya Khrennikov in Moscow at ikhrennikov@bloomberg.net

To contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net Torrey Clark, Ville Heiskanen

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