Sharman Networks has agreed to a global settlement of litigation brought against it by the MPAA, the International Federation of Phonographic Industries (IFPI), and RIAA. The creators of the popular Kazaa file-sharing network will pay $115 million to the RIAA, unspecified future amounts to the MPAA and the software industry, and install filters on its networks to prevent users from sharing copyrighted works on its network.
Kazaa has been a thorn in the side of the music and motion-picture industry for years. At one point, the company claimed to be responsible for almost 80 percent of worldwide file-sharing. While that number may be debatable, the fact remains that Kazaa and parent company Sharman Networks have been public enemy #1 for the entertainment industry since shortly after its inception.
The MPAA and RIAA fought back against Kazaa with a worldwide barrage of litigation. Perhaps the highest-profile case was in the Australian legal system. In September 2005, the Australian Federal Court found that Sharman had encouraged its users to engage in copyright infringement. The company was hit with a bill for 90 percent of the plaintiffs' legal fees and ordered to implement keyword filtering, among other antipiracy measures.
In the US, once the MGM v. Grokster ruling went down, the question of its application to Kazaa was a matter of when, not if. In that decision, the court found that "one who distributes a device with the object of promoting its use to infringe copyright... is liable for the resulting acts of infringement by third parties using the device, regardless of the device's lawful uses."
As has been the case with recent settlements or judgments against P2P applications and networks, Sharman Networks now promises to go straight. Calling the settlement "the dawn of a new age of cooperation between P2P... and content," Sharman Networks CEO Nikki Hemming said that "it has been our long-standing goal for Kazaa to play a significant role in the growing market for licensed online distribution and authorized exchange of copyrighted content using peer-to-peer technology, and this settlement ensures that we will be working together with the content providers to the benefit of consumers, businesses and artists."
In a statement, MPAA CEO Dan Glickman said that the settlement is "an important victory" in what he described as a historical legal case. RIAA CEO Mitch Bainwol echoed his comments, saying that "services based on theft are going legit or going under, and a legal marketplace is showing real promise."
The halcyon days of unfettered file-sharing over public networks do indeed appear to be over. Despite the hopes of Kazaa, iMesh, and other P2P services that have gone legit, there is little reason to believe that consumers will suddenly begin using them to purchase content over networks. Those who want to purchase music will likely head to one of the well-established music sites like the iTunes Music Store, Napster, or even Allofmp3.com. Those who want to legally download movies... well, they're more or less out of luck, given the current state of affairs. Everyone else will either head off to USENET, BitTorrent, or "dark" networks. In the meantime, large-scale commercial piracy operations continue to flourish in Asia and other parts of the world.
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