The music industry strikes back

Forget everything that Sesame Street taught you – sharing is bad. People who share get served lawsuits for more than they can possibly afford, can’t pay to defend themselves in court, and are forced to accept the guilt and settle out of court for a lesser penalty.

Last week the Canadian Recording Industry Association announced plans to sue Canadians that knowingly upload music – share – on the Internet. They are following the example set last year the by the Recording Industry Association of America, which started to sue music swappers for copyright infringements through Peer-to-Peer networks (LimeWire, Kazaa, etc.) in the fall of 2003. Already this year, January and February, the RIAA has issued a total of 1,063 new suits.

Almost without exception, the defendants have acknowledged their guilt and settled out of court for an average of $3,000 each – far less than the six-figure sums the RIAA figured they were entitled to based on the number of music downloads they recorded.

That exception has come from one New Jersey resident by the name of Michele Scimeca who answered the RIAA’s lawsuit against her with a counter-suit of her own – alleging that the practice of issuing huge suits that force downloaders to settle out of court is tantamount to racketeering.

According to Scimeca’s lawyer, "This scare tactic has caused a vast amount of settlement from individuals who feared fighting such a large institution and feel victim to these actions and felt forced to provide funds to settle these actions instead of fighting. These types of scare tactics are not permissible and amount to extortion."

Scimeca’s argument hasn’t been tested in Canada yet, but you can be sure that it will be.

On Feb. 13, the CRIA acknowledged plans to file court orders with five major Internet service providers to reveal the identities of 29 online file swappers. Defending its actions, the CRIA said that the Canadian music industry has lost an estimated $425 million in retail sales to downloaders since 1999, resulting in layoffs of 20 per cent for an industry that typically employees 45,000 Canadians.

Both the RIAA and CRIA say that the lawsuits, unpopular though they may be, are having an impact on the number of people sharing music online. Music swapping on the leading P2P services is down by about half, and the use of pay services like iTunes is increasing steadily.

At the same time, another report casts doubt on the effectiveness of the lawsuits, suggesting that P2P users have found back channels to trade music. A couple of research firms believe that file swapping is actually increasing.

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