Music giants Universal, EMI, Warner, Sony BMG and their local subsidiaries are suing China's largest search engine Baidu for allegedly infringing the copyright of hundreds of songs, the company said.
"We confirm that Baidu is being sued over alleged infringement of music copyright," said Baidu's vice president of marketing, Liang Dong, who did not reveal details.
The music companies allege Baidu has made it easy for users to download illegal copies of their songs via its MP3 search engine, the Hong Kong-based Standard newspaper reported, citing a source close to the music companies.
Cinepoly, Go East and Gold Label are also suing Baidu in a move that could force it to shut down the MP3 search engine, a key to the company's popularity among young Chinese Internet users, the report said.
Liang said Baidu.com only provides a music search service rather than downloads and added that the firm was communicating with the plaintiffs.
He was reported to have met several music company executives Wednesday to discuss copyright issues, the Standard cited a source as saying, adding the goal was to "cooperate and make a platform for legal music downloads."
Liang said the discussions were "positive."
"From the copyright point of view, we think differently than the music companies. Baidu is just a platform for music search," Liang said.
He also noted that music companies were not well-prepared to embrace the digital music era and encouraged them to explore new business models to provide a legal platform for music search.
The group also insisted it "has always been an advocate of improving copyright protection on the Internet and has been in discussion with relevant parties," according to the Standard.
Although the music companies are seeking compensation, what they most want is the suspension of services that allow Internet users to gain free access to copyrighted material, the newspaper said.
As Internet usage has soared in Asia in recent years, the music industry's revenue has fallen dramatically, largely due to MP3 downloads from unauthorised sources.
Baidu.com holds a leading share of China's search market at 37.4 percent.
Its stock sale in August on Nasdaq was one of the year's hottest initial public offerings -- with its shares surging 354 percent in one day, prompting some analysts to nickname it the "Chinese Google".
Chinese music company Shanghai Busheng Music Culture Media also filed a lawsuit against Baidu in June alleging unauthorised downloads.
There has been a growing concern among investors over the company's prospects. Its shares dropped 28 percent in New York Wednesday after two analysts warned the stock was seriously overvalued.
