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Sony, Universal & Warner Music Companies File Lawsuits Against vKontakte in Russia for Large Scale Music Piracy

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Sony, Universal & Warner Music Companies File Lawsuits Against vKontakte in Russia for Large Scale Music Piracy

Postby sunnyd » Thu Apr 03, 2014 6:16 pm

VK, formerly known as vKontakte, which is a highly popular social media site in Russia commonly referred to as the “Facebook” of Russia, is finding itself under fire for ‘large scale’ music copyright infringement. Three separate lawsuits for alleged music copyright infringements have been filed by three record companies: Sony Music Russia, Universal Music Russia & Warner Music UK.

According to the IFPI (the International Federation of the Phonographic Industry), VK, which operates a music service, is “deliberately facilitating copyright piracy on a large scale.” The IFPI states that the action is being taken to “protect the rights of record companies investing in Russia and to help develop a thriving licensed music business.” The IFPI also stated that the litigation follows months of preparation and repeated attempts to persuade VK to respond to the alleged copyright infringements. So far, VK has refused to make licensing deals with the rightsholders.

The lawsuits, filed in the Saint Petersburg & Leningradsky Region Arbitration Court, charge VK with creating a music service which is “aimed at large-scale infringement of the rights of copyright holders.” It was said in the complaint that VK is operating an unlicensed music service which involves a huge library of copyright-infringing tracks stored on its website, including thousands of copies of most of the tracks in the Russian and US Top 20 Charts. VK provides unlimited access for registered users to the digital library, allowing its tens of millions of users to search for and stream music.

The recording industry is seeking court orders to require VK to remove the infringing content from its service. The plaintiffs are also seeking a court order which requires VK to implement “effective industry-standard measures, such as audio fingerprinting”, to prevent unauthorized sharing of the library content and to prevent unauthorized uploading of the companies’ catalogues. The lawsuits include a claim for compensation of just over RUB 50 million (US $1.4 million) for the infringing content.

In the press release announcing the lawsuits, IFPI chief executive Frances Moore said, "For the music industry to grow and prosper, it needs digital partners that are licensed, that respect copyright and which pay artists and producers for their work and investment. VK's music service, unlike others in Russia, is an unlicensed file-sharing service that is designed for copyright infringement on a large scale.”

Leonid Agronov, CEO of NFMI (National Federation of the Music Industry), said "Music companies in Russia need a secure environment where they can invest in artists, offer new music to consumers and develop a viable business. Today this is extremely difficult due to the unlicensed service of vKontakte, which is earning revenues from music without respecting the rights of those who created and produced it. This is why NFMI has supported the efforts of the international industry to persuade vKontakte to stop its infringements and why we support the legal proceedings filed today. This is an action which can benefit the whole music industry in Russia, and an opportunity to improve the business environment for those who depend on copyright and other rights for their livelihood."

The RIAA placed VK on the US Trade Representative's list of notorious markets, where they have been for four years. Today’s announcement of the lawsuits is not VK's first instance of trouble with copyright infringement legal issues. They were found guilty in November of 2012 in a lawsuit brought forward by Russian music companies SBA Publishing and SBA Production. They were fined again in October of 2012 for copyright infringement, and ordered to pay 550k roubles ($17.8k) to Russian music label SBA Gala Records, which is a licensed distributor of EMI Music’s international catalogue.

VK has approximately 143 million registered users globally, of which 88 million are from Russia. The look and function of their site are similar to Facebook; however, unlike Facebook, they operate an unrestricted music file sharing service. Registered users have the ability to upload and store both music and video files, which then become available for all other users of the service to search and stream. Any music file stored on VK can be added with a single-click to the user's own music library. Music and video files uploaded by a user can be found by all other users regardless of the uploader's privacy settings, and the site's functionality does not enable the uploader to prevent them from being shared further, nor remove them from the service once uploaded. VK‘s social network generates revenue from targeted advertising, and it's been reported that they had revenues of USD $172 million in 2012. According to IFPI, VK has never paid the claimant companies for the use of their recordings.

Knowing that VK has been fined in the past, these three lawsuits could very well bring an end to their service depending on the full damage awards. However, that remains to be seen depending on how hard the gavel comes down on them, and whether or not they agree to licensing compliance. We'll post updates as they become available, so stay tuned.

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