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Kazaa pays $100m to become legit

updated 12:40 pm EDT, Thu July 27, 2006

Kazaa pays $100m

Kazaa has reached a settlement with four major record labels paying out $100 million for enabling the illegal exchange of files through its technology file sharing network. Macworld UK reports that Sharman Networks, owner of the Kazaa service, will have to pay out the money to the four major labels -- it unknown is whether or not the independent labels will receive any money despite accounting for a fifth of the entire music market. David Munns vice chairman of EMI Music believes that the settlement is "a big step forward in the development of a vibrant, legitimate digital music marketplace." This was not the first of Kazaa's troubles as last year it lost a landmark case, where it was ruled that Kazaa operators were guilty of authorizing widespread copyright infringement, before the Federal Court of Australia. In addition, Kazaa will begin filtering content to remove copyrighted material immediately as part of the agreement and may also put in place a legal model of distributions.

"Kazaa was an international engine of copyright theft, which damaged the whole music sector and hampered our industry's efforts to grow a legitimate digital business," explained chairman and CEO of the International Federation of the Phonographic Industry. "It has paid a heavy price for its past activities. At the same time Kazaa will now be making a transition to a legal model and converting a powerful distribution technology to legitimate use."

The settlement is seen as a major victory by some--as a case that may set precedent for more legal actions against Peer-to-Peer networks. Kazaa, at its peak, reached 4.2 million simultaneous users worldwide and has continued to be one of the largest Peer-to-Peer services.

by MacNN Staff




  1. dwoodruff

    Joined: Dec 1969


    what a joke

    What this says is that you can break the law, they pay to get away with it from the profits.

    I'd be fine if it was $100 million on top of repayment of all profits from illegal song distribution.

  1. Gen. Meister

    Joined: Dec 1969


    Wow, a legal p2p service

    Whats new?

    I wonder how long it took them to get enough cash from the idiotic public who want to pay a one time fee expecting a spyware free program that can download unlimited music.

  1. testudo

    Joined: Dec 1969



    The real joke is how much money and time is spent stopping or trying to stop the unstoppable spread of copyrightable works.

  1. iFrankie

    Joined: Dec 1969


    What a Waste

    What a waste of money! That 100 million could be better spent on something else.

    I'm betting none of that 100 million will be sent to the artists. In the end, paying out the 100 million will probably be the final nail in the coffin for Kazaa.

    I've never used Kazaa or support what they do but paying out 100 million to record labels that are just as crooked as Kazaa is a shame.

    Hey Kazaa, keep the 100 million bucks and invest it in developing a radically new system that will change the industry. Instead you are going to try to compete in a market that is already dominated and will be closing shop before you know it. Damn, why didnít we keep that 100 mil!

  1. Albert

    Joined: Dec 1969



    and now these record companies who recieved this 'payola' from kazaa should be sued for recieving monies for nothing and for failing to pay the rightful copyright owners of the stolen songs any due diligence. The copyright holders should sue under this obvious 'racketeering' of the usic business.

    This is FRAUD treat it as FRAUD, arest the CRImNALS and throw away the keys, TImE FOR America to INFORCE THE LAWS OF THIS COUNTRY!!!!!!

    This PAYOFF of the big wigs is JUST AS ILLEGAL AS THE SONG FILE SWAPPING!!!!!!


    CRImE ALERT!!!!!!!!!!!

  1. FastAMX79

    Joined: Dec 1969



    stupid! It goes to show ANYONE that if you break the law, as long as you cough up money you can get away with it.

    But its not like they even had software for the mac. I thouhgt this was a MAC news site?

  1. Dakar

    Joined: Dec 1969



    "hampered our industry's efforts to grow a legitimate digital business"

    I must have missed the part where the major record labels were trying to set-up digital music stores.

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