A Win for Record Companies in China

For years, Chinese search engine Baidu has enjoyed a big advantage in the world’s largest Internet market. Millions of Web surfers in China used Baidu’s MP3 search service to find links to free—and unauthorized—downloads, a feature that rival Google declined to offer. Foreign record companies sued to stop the service, but Baidu won the first round in Chinese courts by asserting that it only provided links, not the actual content. Even after the U.S. government in February tried to shame Baidu into compliance by putting it on a list of more than 30 of the world’s most “notorious markets” for pirated products, the company persisted.

Now Baidu is making peace with major record companies. On July 19 the company announced it had signed a deal with Universal Music, Warner Music, and Sony Music to offer copyrighted songs on a new social music platform called Ting! (Mandarin for “listen”). Baidu will pay content owners an undisclosed sum for each click, and in return record companies have agreed to drop an appeal of their lawsuit against Baidu. “We are serious about bringing discipline and order to the Internet with regards to music,” says Catherine Leung, Baidu’s general manager for music and entertainment.