Yahoo China in Dutch Over World's Music

A Beijing court ordered Yahoo's China unit to shell out $27 grand and some change to music companies for copyright violations. The news comes on the same day that Yahoo launched a new legal lyrics site. The 210,000 yuan fine is chump change to a company with a $38 billion market cap, but Yahoo China noted it plans to appeal the ruling, claiming: "This is a case that has far-reaching implications for all search engines."

And that's not just spin. The International Federation of the Phonographic Industry--think of it as the global RIAA--brought the case arguing that Yahoo was in violation of copyright laws by allowing its search engine users to find links to pirated music. Not hosting the infringing music, but merely linking to it.

And there's more, Yahoo is also alleging preferential treatment by the Chinese courts:

Yahoo! pointed out after the judgement that Baidu.com, the largest search engine in China, had been cleared of wrongdoing in a similar case last year. It also argued that search engines should not be responsible for the content found on third-party sites.

If it seems like a lot of fuss over 229 links, that's because 85 percent of recordings in China are illegal, accounting for $410 million in 2005.