WTO Tells China to Ease Regulation of U.S. Media

(CN) - The World Trade Organization handed the United States a major victory on Wednesday with a ruling that China can't claim exclusive distribution rights to the CDs, DVDs, books, music and other media products made by U.S. companies and sold in China.

The United States filed a complaint in March 2008, after unsuccessfully trying to get China to lift its hold on distribution. China required all U.S. media producers to route their products through Chinese state-owned companies.

The WTO issued the 464-page ruling last month, but the opinion wasn't released to the public until Wednesday. The WTO panel supported many of the claims made by trade associations representing U.S. media companies such as EMI, Sony BMG, McGraw-Hill and Simon & Schuster.

Hollywood studios like Warner Bros., Disney and Paramount were less successful in challenging China's purported "duopoly," or requirement that U.S. films go through one of two distributors, a restriction not imposed on Chinese films.

"The United States has not established that the alleged discriminatory 'duopoly' for film distribution within China is attributable to China," the panel wrote.

But the ruling opened another door for U.S. music companies with the finding that China violated trade rules by blocking U.S. companies, such as Apple's iTunes music store, from offering music downloads directly to Chinese customers.

China "has acted inconsistently" with provisions of the agreement it made with other WTO members, and the general agreements governing trade among all WTO members, the panel concluded.

It instructed the Chinese government to "bring the relevant measures into conformity with its obligations under those agreements."

U.S. Trade Representative Ron Kirk called the ruling a "significant victory to America's creative industries."

"These findings are an important step toward ensuring market access for legitimate U.S. products in the Chinese market," he said in a statement, "as well as ensuring market access for U.S. exporters and distributors of those products."

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit