P2P Service Cuts Deal with RIAA and NMPA in Lawsuit for Undisclosed "Substantial" Sum
It is time for you to stop all of your swapping. Unless you have permission, of course. And while you’re at it, give us a big ol’ check.

This was the message brought to online music-swapping service Audiogalaxy by the RIAA and National Music Publishers’ Assn., which jointly sued the netco in May (see story, 5/24). The Austin, Texas-based peer-to-peer firm agreed to comply with plaintiffs’ terms in a settlement deal announced today.

In addition to agreeing to permit only the circulation of authorized music via the application—which can regulate what user searches turn up, because, like Napster, it operates with a quaint centralized-server system—Audiogalaxy will also cough up an undisclosed amount to the litigants. A joint RIAA-NMPA release calls the fee "substantial."

The regulated service will require permission from rights holders on both the record and publishing sides before allowing a specific song file to circulate. This is being called a "filter-in" system by plaintiffs, while millions of kids refer to it as a "guess I’ll download Grokster now" system.

"We are pleased to settle this case quickly. This is a victory for everyone who cares about protecting the value of music," announced RIAA Chairman/CEO Hilary Rosen. "This should serve as a wake-up call to the other networks that facilitate unauthorized copying. The responsibility for implementing systems that allow for the authorized use of copyrighted works rests squarely on the shoulders of the peer-to-peer network. And the same goes for the placing of unauthorized punchlines at the ends of my quotes."

"The message is clear—there is no place on the Internet for services that exploit creators' work without fair compensation," added NMPA Prexy/CEO Edward P. Murphy. "Such services hurt creators and hurt the legitimate Internet businesses that wish to comply with the law and compensate the creators. The swift resolution of this matter is thus a double victory that creators and legitimate Internet businesses should join in hailing. What do you mean, there are no legitimate Internet businesses left?"

In a related story, hitsdailydouble.com editors saw their creative labor exploited without fair compensation today, but only because we ran out of bananas.