Russia's telecoms regulator has just stated that the country's Facebook equivalent vKontakte has done enough against piracy to have itself removed from the USTR's Special 301 Report. However, the major labels including Sony, Universal, EMI and Warner seem to disagree and say they are preparing to sue the social networking giant. At stake - millions of MP3s not only on VKontakte but on free download sites around the web.

For several years, vKontakte, Russia’s social networking giant, has been marked as a piracy enabler by rightsholders and even the U.S. Government.

In several Special 301 Reports published by the United States Trade Representative, Russia’s Facebook equivalent has been criticized for the huge quantities of unauthorized media it hosts and labeled a “notorious market”, a term usually reserved for piracy’s apparent worst-of-the-worst.

The problem stems from the fact that vKontakte allows its tens of millions of users to upload anything from movies and TV shows to their entire music collections. This content then becomes available for anyone to enjoy, from members of the site to complete outsiders. Many of the big, free MP3 download sites on the web are powered by MP3s pulled from vKontakte, so this is not just a Russian issue.

In response to the complaints, earlier this year the company confirmed it had deployed fingerprinting technology, similar to YouTube’s Content ID. Whether this would be enough to appease rightsholders would remain to be seen, but in a statement this week the head of Russia’s telecoms regulator Roskomnadzor said the site’s actions should be enough to remove it from the USTR’s list.

“VKontakte is now in active dialog with all the rights owners,” Alexander Zharov said. “It is my hope that, given the progress in their relations with the owners, VKontakte will be excluded from the 301 list.”

So good news for vKontakte then? Well, not so fast. Let’s not forget that it’s the Hollywood studios and major recording labels that provide the fuel for the Special 301 Report and if they aren’t happy, the USTR isn’t going to be happy either. And all the signs suggest that they are far from content.

In fact, according to reports in Russian media this morning, the major labels are getting ready to take vKontakte on in the traditional way – via lawsuit.

National Federation of the Music Industry chief Leonid Agronov says that Sony, Universal, EMI, Warner and other rights owners have run out of patience and will sue the social network after the holiday period is over.

“This year, we have tried all the civilized ways of influencing the state, society and the Internet industry. Next year we will be much more aggressive and brazen. We have spent four years trying to normalize the situation to somehow move piracy beyond the law,” he said.

NFMI members are said to be preparing to sue in the St. Petersburg Court of Arbitration in an attempt to have at least six thousand pieces of music removed from vKontakte, including works from Beyonce, 50 Cent, Eminem, Jay-Z, Madonna, Skrillex, Linkin Park, Metallica and Pink Floyd.

Agronov said that the labels have tried to negotiate with the site in order for it to begin paying for the music it hosts with a suggestion it shifts those costs to its users, but apparently vKontakte is interested in neither. It nevertheless profits from advertising while its users listen to unauthorized music, he added.

According to Izvestia, the legal action could take up to a couple of months or even a couple of years, depending on the determination of each side.