Yahoo China sued by a record company

In December, a Chinese court ruled that Yahoo China had violated copyright by providing links to pirated music. The record companies won the case against Yahoo China, which is owned by Alibaba.com Corp, because of regulations issued after the 2005 suit against Baidu had been filed, says Leong of the record industry federation.

That ruling signaled the courts are following the June 2006 regulatory change in China that clarified liability for distributing pirated content over the Internet, she says. "The new regulations make our case much stronger," Leong says.

The industry group in February began legal proceedings to enforce the December ruling after finding Yahoo China's site still offered links to pirated music Web sites, Leong says. As of today, the links were still active.

Porter Erisman, a Beijing-based spokesman for Alibaba, declines to comment. Sunnyvale, California-based Yahoo swapped $1 billion and its China unit in 2005 to become Alibaba's biggest single shareholder.

"The record industry wants partnership with China's Internet companies, but one that is based on respect of copyright and the law," John Kennedy, chairman and CEO of the International Federation of the Phonographic Industry, says in the emailed statement.