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The case was brought by subsidiaries of EMI, which complained that vKontakte users were sharing their music without authorisation.
St Peterburg’s commercial court ruled in the labels’ favour in January; vKontake appealed and lost on Thursday, according to global music labels’ umbrella group the IFPI.
Integrated file-sharing is one of the key draws for vKontakte users. If vKontakte drops the feature from its site in light of the judgement, as record labels are demanding, it could level the playing field between vKontakte and competitors.
DST-backed Classmates site Odnoklassniki and Facebook currently trail vKontakte, which nevertheless is often called “the Facebook of Russia”, not least for its stunning visual similarity to Zuckerberg’s site.