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Thursday, June 7, 2012

Russian Social Network Lost Court Appea

Russia’s largest social networking site, InTouch (vKontakte) has sometimes been compared to Facebook because of its blue design. However, the structure of the sites is different, and InTouch (www.vk.com) is recognized as a more convenient and attractive platform. This social network has over 135,000,000 unique users from Russia and former Soviet Union.


Recent press reports confirm that InTouch just lost a court appeal where it has tried to overturn an earlier court ruling claiming the site is eligible for copyright violation, because the network enabled file-sharing services.

The lawsuit was launched by EMI’s subsidiaries – SMA Music Publishing and Gala Records. Those complained that the users of InTouch were sharing their content without any legal authorization. As a result, St. Petersburg’s Commercial Court handed down its decision in favor of the music industry this past January, and this decision was agreed upon again a week ago.

The creator of the service, Pavel Durov, hasn’t announced what he was planning to do now to stop copyright infringement. Perhaps, the portal might have to shut down or restrict its file-sharing service. But this will greatly upset millions of its users – indeed, InTouch’s integrated file-sharing service was one of key features that drew millions to sign up with the service. That is the only service where you can find and stream any video or audio file you want in a matter of seconds.

Meanwhile, InTouch is much more popular in Russia than Facebook (perhaps because of the size of the country). The company is currently valued somewhere around $1.5 to $3 billion (estimated by the International Federation of the Phonographic Industry). The latter, by the way, took sides with SBA and Gala in this case.

PaidContent claimed that InTouch’s trump over similar platforms in the region has been exactly this music-sharing feature. The country is a potentially exciting growth market for music, though it’s now being held back by a culture of copyright violation, says the IFPI. The outfit also pointed out that if Russia’s burgeoning legitimate business was able to effectively protect itself against copyright infringement, the country could have become a top 10 music market.

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