Baidu logo at company headquarters in Beijing
Baidu logo at company headquarters in Beijing - 
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STEVE CHIOTAKIS: China's biggest search engine, Baidu, has been ordered to pay $85,000 to a literary website because of copyright infringement. The Chinese press is touting the decision as a landmark case.

But as Marketplace China Bureau Chief Rob Schmitz reports, Baidu and a host of other Chinese Internet sites continue to provide stolen copyrighted material from U.S. companies.

ROB SCHMITZ: It's the dirty little secret for Chinese websites publicly traded in the U.S. On one hand, they're receiving a lot of money from American investors. On the other, they're stealing a lot of revenue from American entertainment companies. Exhibit A:

CLIP FROM 'THE EXPENDABLES:' We want the money now.

A pirated version of the action movie 'The Expendables' on Youku, China's largest online video site. And guess what you have to sit through before you see the movie?


A commercial, in Chinese, for Kentucky Fried Chicken -- an American company trying to make ad revenue off of another American company's stolen intellectual property. It's not clear if KFC knows its ads on Youku are being paired with pirated content, but marketing expert Paul French says Americans should start questioning why they're investing in these Chinese sites.

PAUL FRENCH: You should care about it because it's your intellectual property that's being stolen. This is Hollywood. These are large, large employers of Americans.

Youku says it's too difficult to police the content uploaded by its users. But it's funny, says French: All these Chinese sites are adept at removing any trace of politically sensitive topics -- like the Dalai Lama -- within minutes.

In Shanghai, I'm Rob Schmitz, for Marketplace.

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Follow Rob Schmitz at @rob_schmitz