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Australian Recording Industry Announces Historic Global Pay-Out From Kazaa
By Mi2N
(more articles from this author)
2006-08-10
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The operators of the Kazaa internet file sharing system will pay substantial compensation to the Australian and international record labels that had sued the service in one of the world's biggest music piracy settlements. Kazaa will also convert to a legal business model with licensing arrangements to be negotiated with record labels and filtering out of infringing content.

The decision follows a landmark ruling in the Federal Court of Australia last year which found the Kazaa operators liable for authorising widespread copyright infringement. The settlement will see the end of legal proceedings against Kazaa in Australia and in the United States, where the Supreme Court last year delivered a unanimous ruling against the file-sharing operator Grokster.

Music Industry Piracy Investigations (MIPI) Director Mr Stephen Peach said, "Kazaa's operators have accepted responsibility for their illegal activities and have paid the price for the harm caused to artists and labels. This historic outcome justifies action taken by Australian and international record labels to fight internet music piracy. This very successful result sends a powerful message that copyright infringement will not be tolerated."

Legal action began in Australia in February 2004 when the record labels secured court orders to raid 12 premises in three states. The case was successful against Kazaa companies and executives, including Sharman Networks Ltd, LEF Interactive Ltd, Sharman CEO Nikki Hemming, Altnet Inc, Brilliant Digital Entertainment Inc, and Altnet CEO Kevin Bermeister. Under new and agreed court settlement orders, Kazaa will implement robust and sophisticated filtering technologies to block out illegal content.

Mr Peach said, "This is an excellent result. The recording industry has consistently urged the operators of file sharing networks such as Kazaa to stop their illegal activities, legitimize their businesses and use their technology to participate in a fair and legal online music market. The decision by Kazaa to stop its infringing activities and convert to a legal business represents a fundamental shift in the online music landscape, which can only be good news for artists and all who work to create and produce music."

Mr Michael Williams, partner of Gilbert+Tobin, the law firm that ran the Australian case for the music industry, said, "This is a turning point in the fight against online piracy. The payment of compensation by Kazaa, after it was held accountable in an Australian Court, demonstrates that there are no piracy safe-havens when it comes to the Internet. It should be a warning to anyone seeking to run a business based on piracy."

The settlement coincides with a new report from the international recording association, IFPI, entitled "Protecting Creativity in Music," which chronicles a year of sea-change in the digital music market during which unauthorised services around the world have steadily migrated to legitimacy including Grokster and Bearshare in the US, Ezpeer in Taiwan, Soribada in Korea and now Kazaa.

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