Music companies have lost their appeal against the Bejiing court’s ruling that the leading Chinese search engine was not guilty of copyright infringement, Variety reports. The companies, including EMI, Sony (NYSE: SNE) BMG, Warner Music Group (NYSE: WMG) and Universal Music Group applied for damages, apologies and suspension of Baidu’s music download service because they believed the media giant was aiding illegal file sharing and playing their copyrighted music. In December, the People’s High Court of Beijing had ruled that although Baidu (NSDQ: BIDU) assisted third party sites in transmitting infringing music, the company itself was not liable for copyright infringement.

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Baidu argued that it operated similarly to other MP3 search engines in that its searches did not yield results differentiating between licensed and unlicensed music.

Meanwhile, some have suggested that this ruling is an example of Chinese courts favoring local companies over its foreign counterparts. Most recently, Yahoo (NSDQ: YHOO) China was fined 200,000 yuan for illegally linking to MP3 and other files on third-party web servers.