Kuaishou copyright dispute escalates ahead of Hong Kong IPO

A government-backed organization representing Chinese artists and music labels has threatened to sue short video-sharing app operator Kuaishou Technology for copyright infringement, just days before the company is slated to go public in Hong Kong this week.

In a statement (in Chinese) released Monday, the China Audio-Video Copyright Association (CAVCA), the only organization approved by the National Copyright Administration to undertake collective rights management for musical works on behalf of its members in China, said it had discovered around 155 million videos on Kuaishou that used unlicensed songs as background music.

In order to “protect the interests of music rights-holders,” CAVCA noted that it had asked Kuaishou Technology to take the initial step to remove 10,000 videos from its platform and be more careful about copyright infringement going forward. 

The takedown notice was the culmination of a series of attempts made by CAVCA in the past few months to start licensing negotiations with Kuaishou, China’s second-largest short video app after ByteDance-owned Douyin, the Chinese version of TikTok. 

At a press conference in November last year, CAVCA said it was in talks with several major short-video platforms to obtain adequate licences for the songs being used in their videos. While praising Douyin for its effective cooperation and swift decision to remove problematic content, the association singled out Kuaishou as an “egregious example” of “indulging widespread copyright violations” on its platform and “avoiding its legal obligations.”

The shaming, however, has not yet led to any action by Kuaishou. A spokesperson from CAVCA said last week that it was weighing legal action if Kuaishou didn’t respond. In the meantime, the association filed a string of copyright complaints against Kuaishou with app stores, including the Apple Store, which threatened to remove Kuaishou from its store unless the two sides could find a long-term solution to the issue.

Since launching as a GIF creator app in 2011, Kuaishou has successfully seized on the surging popularity of short-form content in recent years, and turned itself into a short-video and livestreaming juggernaut in China, boasting 776 million monthly active users at the latest count. 

Although Douyin, China’s domestic version of TikTok, has an advantage over Kuaishou in name recognition internationally, Kuaishou enjoys a stronger foothold in rural and less-developed areas of the country, where grassroots users like farmers and migrant workers share snapshots of their everyday life from harvesting crops and lip-syncing to pop songs.

The negative news about its copyright dispute arrived at a time when Kuaishou Technology, the company behind the app, was gearing up to raise as much as $5.4 billion in its upcoming initial public offering in the Hong Kong stock exchange on February 5. If it succeeds, it will have pulled off the world’s biggest internet IPO since the beginning of the COVID-19 pandemic. 

In its IPO filing, Kuaishou Technology said that it had established licensing agreements with several music labels and developed measures to address copyright infringement complaints regarding videos on its platform. But as CAVCA revealed, many of the songwriters and music companies that it represents still don’t get paid royalties when their songs are inserted into Kuaishou videos.