Piracy and the Internet: How MP3's Changed the World

ABSTRACT   Internet Piracy is huge! Currently people download software, music, and movies, costing the respective industries billions every year. The software industry already suffered the transition of piracy. Virtually all software manufacturers have piracy built in to their budget. The music industry is in the midst of its piracy evolution. The movie industry is just starting to feel the beginnings of Internet piracy. It first experienced this type of piracy when Sony released the Betamax. Lets see how the motion picture industry handles the pressure of Internet technologies.

Napster employed a “centralized” peer-to-peer (P2P) technology that left it liable for the direct copyright infringement of its users. Other services, such as Grokster, employ a “decentralized” P2P technology, thereby avoiding the legal responsibility of their users. Currently, the U.S. Supreme Court is evaluating P2P technology. A decision will be made in the summer of 2005. However, this might go to Congress for the final say in the matter.

Title 17 of the United States Code, often referred to as “The Copyright Act,” discusses all the copyright laws and copyright infringement (direct, contributory, and vicarious) categories. The Digital Millennium Copyright Act was created in 1998 to amend title 17 by adding Internet Service Provider (ISP) limitations. It also helped internationalize its procedures by forming an alliance with the various worldwide intellectual property organizations.

The Recording Industry Association of America (RIAA) was the organization responsible for suing Napster and ISPs. The RIAA’s goal was to make it difficult for people to download copyrighted music over the Internet. They successfully restructured Napster, which essentially crippled it by slowing downloading of mp3 files through the Internet. However, with modern decentralized P2P software, the legal battles make it hard and even impossible to attack the creator of the software. RIAA went after the users of the software for direct infringement. They sued Verizon to give them names of people who use P2P software and sued many people, from teenagers to college professors. Thousands of people have been sued and most settled with fines ranging from $2,000 to $20,000. To warn the users of their systems about this liability, all P2P software vendors now have disclaimers on their websites. Also colleges and other public networks posted fair use policies, and warned against possible violations, hefty fines and even jail time.

Current efforts for changing the recording industry legally are lead by Apple Computer. Apple sells music for 99 cents a song and makes the process a cinch. In addition, the music they sell has built in Digital Right Management that prevents people from abusing the work’s copyright. This is one step in the right direction, and people have been using it. The music industry will have to adapt to its customers needs. That means leveraging the Internet for ease of use and instant gratification that all Americans want. We have seen how popular mp3 players are. Let us see how the motion picture industry adapts to the customers wants. MGM is in the process of suing Grokster. This will surely redefine how P2P software is treated in regards to copyright infringement.

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