China's Top Online Search Engine Baidu Encourages Music and Movie Piracy

A report on so-called "Notorious Markets" by the United States Trade Representative showed that Baidu linked to illegal pirating websites.
BEIJING – Baidu, China's top online search engine, perpetuates theft of copyright and undermines respect for the rule of law, a report on so-called "Notorious Markets" issued late Monday by the United States Trade Representative said.
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The USTR accused Baidu, the most visited website in China, of "inducing" consumers to consume pirated movies and music by producing search results linking websurfers to illegal third party web sites.

China has more websurfers on earth than any other nation – numbering more than 450 million by the end of 2010 – and Baidu is among the top 10 visited websites in the world.

The NASDAQ listed company declined media requests for comment Tuesday in China.

Shares in the Beijing based company were down nearly 2% in early Tuesday trade in New York to $118.86 each.

The USTR report comes weeks before China is supposed to tell the World Trade Organization how it has moved to comply with a Dec. 2009 ruling insisting it allow greater foreign participation in the distribution of copyrighted cultural content. Critics say that China protects domestic Internet, movie and music companies by freezing out competitors visiting from overseas and wishing to do business.

The USTR said that the production and sale of pirated goods is bad for the growth and success of legitimate businesses across the globe. "Piracy and counterfeiting undermine the innovation and creativity that is vital to our global competitiveness," USTR's Ron Kirk, President Barack Obama's principal trade advisor, said in a statement.

By Baidu's own admission, its popularity stems in part from a service that aggregates links to illegal materials, including pirated music and movies. The Recording Industry Association of America said in a statement. "Few if any of the links provided by Baidu connect the user to legitimate versions of copyright-protected materials. It is undoubtedly one of the largest distributors of infringing music in the world," said Neil Turkewitz, RIAA evp, International.

The RIAA is to the music industry what the Motion Picture Association is to Hollywood. The trade organization claims its members create, manufacture and/or distribute about 85% of all legitimate recorded music produced and sold in the United States.

The USTR report named 33 violating companies in total, including Canada's isoHunt and allofmp3.com clones in Russia and Ukraine.

"Whether online or in the physical space, these are firms who either directly profit from the sale or other distribution of illegal materials, or who profit from facilitating such theft -- in many cases through the sale of advertising," Turkewitz said.

Thank you Hollywood Reporter

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