Yahoo China will be sued by record labels for infringing copyright laws, a group representing the companies said Monday.
"We've started the process and as far as we're concerned, we're on a track to litigation," said John Kennedy, chairman of the International Federation for the Phonographic Industry.
Operated by Alibaba.com Corp., which is 40% owned by Yahoo Inc., Yahoo China provides links on its website to illegally copied music on nonaffiliated sites, according to the federation.
About 90% of all recordings in China are illegal, with sales of pirated music worth about $400 million annually, according to record industry officials.
Porter Erisman, a spokesman for Alibaba.com, declined to comment.
EMI, Universal Music Group, Sony BMG Music Entertainment, Warner Music Group Corp., Go East Entertainment Co., Gold Label Entertainment Ltd. and Cinepoly Records Co. last year filed a civil suit against Baidu.com Inc., which is the most-used Internet search engine in China.
The record companies failed to reach agreement on the case in a meeting Friday with Baidu, calling the civil settlement offer by Baidu unacceptable, said Kennedy, without providing further details.
Baidu declined to comment on Friday's talks.
Kennedy declined to say how much compensation the record companies would be seeking in a civil suit against Yahoo China, the country's second-largest search engine.