Baidu, China's biggest and most popular search engine, has for many years been accused of infringing copyrights of artists and record labels. After years of litigation, Baidu has reached an agreement with One-Stop China (OSC), a joint venture whose shareholders are Universal Music, Warner Music, and Sony Music. The agreement enables legal free music downloads via the search site.
A direct competitor to Google, Baidu is ranked as the number one most visited search site in China. Baidu's market share in 2011 was approximately 80% v. roughly 20% for Google.
In 2005, Universal Music Group, Warner Music Group and Sony Music Entertainment filed lawsuits against Baidu in the Beijing No. 1 Intermediate People's Court for copyright infringement. In 2006, the court dismissed the claims, on the ground of lack of legal basis.
In 2008, the music labels filed new lawsuits for copyright infringements of its songs in Baidu's MP3 section, this time claiming compensation of 63.5 Million RMB.  In 2010, the court dismissed the claims again, this time on the ground that the plaintiffs had failed to prove that Baidu knew or should have known that providing hyperlinks to these songs constituted an infringement of the plaintiffs' rights to circulate their works online.
The plaintiffs' appealed to the Beijing Higher People's Court.
Following two public hearings, the plaintiffs and Baidu reached an agreement to settle the dispute with the help of the Internet Society of China Mediation Center.
According to the agreement, the OSC shareholders will license their song catalogues and upcoming new releases, including Chinese and international tracks, which can be streamed or downloaded from Baidu's servers. The new partnership with OSC included a conciliation agreement, endorsed by the Beijing High People's Court that ended outstanding litigation between the OSC shareholders and Baidu.
Based on the partnership, music will now be available for Chinese users to stream or download via Baidu’s MP3 search and its advertising supported music platform Ting. While these services are free for the users, Baidu will pay the record labels for each downloaded or streamed song and a share of the advertising revenue.
As a reward for entering into this agreement, Baidu got removed from the so-called "301 list of notorious markets" by the Office of the U.S. Trade Representative in December 2011.