Sony dropped out of the action during last summer after agreeing a confidential settlement with vKontakte but the Universal and Warner cases continued.
“VK’s music service, unlike others in Russia, is an unlicensed file-sharing service that is designed for copyright infringement on a large-scale,” the IFPI said at the time.
Last September both labels enjoyed a significant victory when the Saint Petersburg & Leningradsky Region Arbitration Court found that although vKontakte could not be held liable for infringement, it was obliged to implement “effective” filtering or other technology to prevent infringement of the labels’ rights.
In the Universal Music case the label had asked for 13 music tracks to be removed from vKontakte and compensation of around 15.6 million rubles ($212,900). Warner asked for the removal of 17 tracks and a compensation package worth 20.4 million rubles ($278,400).
This week, however, the celebrations were called off when the region’s Appeal Court issued judgments on March 2nd and 3rd overturning the earlier ruling which ordered vKontakte to implement anti-piracy measures. In a double blow, the Court also upheld the earlier decision that vKontakte is not liable for its users’ piracy.
“These are disappointing judgments which are out of step with rulings both in Russia and around the world, and leave Russia as one of the very few significant music markets in the world that is dominated by a single unlicensed service,” IFPI Chief Executive Frances Moore said in a statement.
Speaking with local media, vKontakte spokesperson Evgeny Krasnikov said that the company had “nailed down” its position as a “bona fide information intermediary.”
IFPI says that the labels will take both decisions to appeal.