Baidu has welcomed a Chinese court's ruling against three major labels that had accused two of China's top search engines of linking to illegal music downloads.

The Beijing No. 1 Intermediate Court found in favor of China's largest search company, Inc., portal site and its Sogou search engine, that the two were not in violation of Chinese copyright law by linking to sites or directly to unauthorized downloads.

"We are pleased with the court's decision and will continue to comply with local laws and regulations," a Baidu spokesman said by e-mail following the Jan. 26 ruling.

The International Federation of the Phonographic Industry (IFPI) reacted sharply to the ruling.

"The judgments in the Baidu and Sohu/Sogou cases are extremely disappointing and we are considering our next steps. The verdicts do not reflect the reality that both operators have built their music search businesses on the basis of facilitating mass copyright infringement, to the detriment of artists, producers and all those involved in China's legitimate music market," the IFPI said in a

Sony BMG Music Entertainment (Hong Kong) Ltd., Universal Music Ltd., and Warner Music Hong Kong Ltd. filed their suit against Baidu and Sohu in February 2008. The labels had asked the two Internet firms to remove thousands of links to downloads of music for which they own the copyright. The suit asked the Chinese court to order the pair to delete the links.

In March 2008, Baidu was also sued by the Music Copyright Society of China (MCSC) and music licensing firm R2G for 1 million yuan (US$146,000) over copyright infringement of at least 50 songs to which MCSC owned the rights. That suit was later settled out of court.

Sony, Universal and Warner, joined by EMI, had lost an earlier case and appeal against Baidu in December 2007 and January 2008. In that instance, the Beijing People's High Court ruled that while Baidu had linked to unauthorized music, that it was not guilty of copyright infringement under Chinese law.

Yahoo China, operated by Group, was fined 200,000 yuan ($26,000) in April 2007 for offering unauthorized free music downloads.

Baidu is China's largest search engine, with about 60% market share. Google, currently considering withdrawing from China after accusing the government of breaking into Gmail accounts of human rights activists and journalists, trails with over 30%. Google operates an extensive, legal download and streaming service launched in 2009.