Russian social media site vKontakte—a platform with 135 million accounts across Russia, Ukraine, Kazakhstan, and Belarus—has lost its court appeal seeking to overturn an earlier ruling against it stating that the company was infringing copyright by allowing file-sharing services to integrate with vKontakte's user-uploaded media libraries.

On May 17, Russia's Commercial Court of St. Petersburg reaffirmed a lower court's January ruling in favor of SBA Music Publishing and Gala Records, a Russian subsidiary of EMI, which claimed that vKontakte was liable for all the copyright infringement taking place on its site. The Facebook-like site (even down to the design) will most likely be required to shutter or severely restrict its file-sharing services.

vKontakte is more popular in Russia than Facebook is, and the company has been valued at $1.5 billion to $3 billion, according to a release provided by the International Federation of the Phonographic Industry (which sided with SBA and Gala in the court proceedings). According to PaidContent, vKontakte's advantage over other similar platforms in Eastern Europe has been this music-sharing function.

“Russia is a potentially exciting growth market for music, although it is currently being held back by a culture of copyright infringement,” the IFPI claimed in a statement. “If Russia’s burgeoning legitimate business can effectively protect itself against such infringement, the country could become a top 10 music market.”