A Chinese court has found Yahoo China guilty of copyright violation, the state-run New China News Agency (Xinhua) reported April 24.

Eleven record companies, including the four international majors, in January sued Beijing-based Yahoo China operator Alibaba for copyright violation due to the portal's practice of providing "deep links" to Web sites offering unauthorized content such as MP3 downloads, lyrics and ringtones.

According to Xinhua, the Beijing No. 2 Intermediate People's Court ordered Yahoo China to pay 200,000 yuan ($27,200) in damages to the 11 labels and to delete the links to the free-download Web sites. The labels had sought damages of 5.5 million yuan ($713,000).

"This is a good news day for the music industry," said IFPI chairman/CEO John Kennedy in a statement. "This judgment will boost the growth of a licensed digital music business in China and provides better protection for intellectual property in this vast, exciting market."

Kennedy says today's verdict sets an important precedent.

"The Beijing Court has confirmed that Yahoo! China has clear responsibility for removing all links to the infringing tracks on its service," he said. "Since this is a judgment made under new regulations in China, today's judgment supersedes the previous decision on Baidu and confirms the responsibility of all similar music search providers in China."

Several of the labels that sued Alibaba are also planning to appeal the Beijing No. 2 Intermediate People's Court Nov. 17 ruling in favor of Being-based Web portal Baidu in a similar "deep-linking" case.

"The judgment gives our members the legal basis to require all music search engines in China to remove infringing links from their service - which we will do," Kennedy said. "The court has effectively called time on this type of mass digital piracy in China."

Yahoo! China issued a statement following the court decision. “This is a case that has far-reaching implications for all search engines," it read. “An important principle is at stake in this case - search engine operators should not be held liable for content posted on 3rd party Web sites.”

The statement added, “We will appeal this decision because we believe Yahoo! China's music search service both meets and exceeds the relevant legal standards for intellectual property protection.”

Yahoo China is owned and operated by Alibaba.com, which is 40% owned by California-based Yahoo. Tokyo-based ISP Softbank owns 30% of Alibaba, and the remaining 30% is held by Alibaba management and employees.