A piracy-fighting group, led by online video service provider Sohu.com and Tencent Holdings, filed lawsuits against search engine company Baidu and others on Wednesday, seeking 300 million yuan (S$61 million) in damages for copyright violations.
At a news conference in Beijing on Wednesday, a dozen companies and organisations accused Baidu and QVOD, a Shenzhen-based video website, of spreading pirated videos and engaging in hotlinking on personal computers and mobile Internet.
Online video websites Youku Tudou and LeTV.com, as well as the Motion Picture Association of America and Wanda Films, joined the move.
Charles Zhang, chairman and CEO of Sohu Group, pointed out that China's video industry has been facing a more severe anti-piracy situation since 2009.
"We cannot keep competing, because where thieves and robbers are having their way, law-abiding companies cannot survive," Zhang said. "We may even have to exit the online video industry if such practices continue."
The group blamed Baidu for distributing content without authorisation and said Baidu's activities are beyond the scope of a search engine.
"Baidu video search pages directly host and play video content, without taking users to a third party site. It is a serious violation of the rights of video sites that have legally procured content," said Zhou Lin, deputy technology director with Sohu.
Baidu is also providing access to rogue video sites that host pirated content and do not have an official license to operate in China, the group claimed.
In an e-mail reply to China Daily on Wednesday, Baidu said it always attaches great importance to the copyright protection of online video content.
Baidu said it developed a screening system to filter pirated videos and opened a 24-hour channel to receive pirated video reports or complaints.
However, Yao Jian, CEO of Youku Tudou, said his company has made reports to Baidu, but nothing changed and the pirated content is still rampant online.
Feng Wei, China president of the Motion Picture Association of America, said a large number of Chinese and foreign films and television productions are distributed on rogue video sites that are easily built using light content management systems.
"We must increase efforts to stop companies from infringing copyrighted material and to pay for the damages for the loss of copyright," Feng contended.
To be able to provide high quality content to the end user, major legitimate video sites have made huge investments. Charles Zhang said the price of TV dramas jumped to 1 million yuan per episode, from zero a few years ago.
"We pay a large sum (to be legal), but we find half of the traffic flow is to pirated websites. We failed to sell our ads, so our income could not cover expenses for content and Internet bandwidth," Zhang said.