China businesses large and small have been stealing intellectual property from US and European firms for so long that no one remembers when it began. The estimates of lost revenue stretch into the tens of billions of dollars, but that number will never be fixed and will remain no better than a guess.
In a surprise move, a Chinese court opened the way for the music industry to bring suit against several local companies which may be allowing illegal downloads of songs. One of the firms at risk in the suit is China’s largest search engine company, Baidu (BIDU).
The Wall Street Journal reports "The music-industry lawsuits claim $9 million in damages." The action is being supported by the world’s largest music publishers. If the legal maneuver is successful, the industry may spread the action against a number of other Chinese businesses.
While the news reflects only a tiny beginning, it may be a sign that China understands that it cannot completely normalize its relationship with the West while it allows massive damage to some of its industries.
The Communists may like free music, but the trade ramifications are probably not worth it.
Douglas A. McIntyre