About 90 percent of all recordings in China are illegal, with sales of pirated music worth about $400 million annually, according to the International Federation of the Phonographic Industry, which is affiliated with the Recording Industry Association of America. The U.S. has threatened to file a case to the World Trade Organization unless China reduces incidents of intellectual property violation.
Seven record labels comprising Sony BMG, Warner, EMI Group Plc, Universal Music Group, Go East Entertainment Co., Gold Label Entertainment Ltd. and Cinepoly Records Co. last year filed a civil case against Baidu.com, China's most-used search engine. No outcome has been reached yet.
A criminal case ``is more serious,'' Adam Tseui, a Taipei- based senior vice president at Sony BMG Asia, said today. ``This is a good direction.''
A criminal case is typically brought by government authorities and can involve penalties including jail time and fines. A civil suit is generally brought by private parties and involves financial damages.
``Punishments issued under criminal law are usually harsher than ones issued in civil cases,'' said Shao Chunyang, a partner at Jun He Law Firm in Shanghai. It is also more difficult to set a compensation payment in civil cases, in which plantiffs have to prove losses, Shao said.
The new law adopted by the State Council, China's Cabinet, on May 18 stipulates that a Web site is jointly liable for infringement ``if it knows or should know that the work, performance or sound or video recording linked to was infringing.''
Baidu, based in Beijing, last September lost a civil case brought by Shanghai Bu-sheng Music Culture Media, the local distributor for EMI. Baidu is appealing the case.
Under the new law, Web sites will need to give authorities contact information for owners of sites that distribute pirated material. Yahoo China's ``chartbusters'' page shows links to 340 MP3 songs.