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Xunlei, the Chinese Internet company whose IPO was scheduled, then postponed indefinitely this summer, is now catching U.S. legislators’ attention.
VentureBeat guest contributor and Shanghai-based lawyer Greg Pilarowski wrote a column in July comparing Xunlei’s media download business to the peer-to-peer file sharing technologies used by Napster and Grokster, both now defunct thanks to their facilitation of rampant copyright violation. He points out that 234 copyright-infringement cases were brought against Xunlei in China in 2009 and 2010. Pilarowski’s column also appeared on the New York Times’ website.
Rob Schmitz at American Public Media news program Marketplace also discussed Xunlei’s copyright issues.
U.S. Representative Scott Garrett, who oversees the Congressional Finance Committee, then wrote a letter to SEC chairman Mary Schapiro on November 10 pointing out, among other things, the U.S. copyrights that Xunlei is likely violating. Garrett’s letter cites Pilarowski’s column in the Times.
Garrett asks several pointed questions, the crux of which is this one: “Does the Commission have a standing policy regarding the approval of foreign companies to be listed on U.S. exchanges where there is evidence that a company’s business model is likely to be in violation of U.S. law?”
We’ve received a copy of Rep. Garrett’s letter, which we’re embedding here as a Scribd document.