Dutch Court Says Kazaa Not Liable

The decision upheld a 2002 appellate-court verdict in Amsterdam that dismissed a suit filed by Buma/Stemra, which protects the interests of the music industry.

Buma/Stemra had demanded that Kazaa stop offering free downloads from its Web site, or face a daily fine of $124,000.

Kazaa’s Media Desktop software is one of a variety of file swapping programs used by tens of millions of people worldwide. Kazaa alone has 3 million to 4 million users at any given time.

Kazaa said the ruling, the first by a national court dealing with the legality of file-sharing Web sites, affirms not just the legality of its software, but all file-sharing programs.

“This victory sets the precedent about the legality of peer-to-peer technology across the European Union, and around the world,” Kazaa founders Niklas Zennstrom and Janus Friis said in a statement distributed on the Internet. They called the ruling a “historic victory for the evolution of the Internet and for consumers.”

In the United States, a federal judge already has dismissed the entertainment industry’s lawsuits against two rival file-sharing services, Grokster Ltd. and StreamCast Networks Inc., saying they could not be held liable for what their users do with the software. That ruling has been appealed, with a decision expected in February.

A parallel case against Kazaa’s parent company, Sharman Networks Ltd., remains pending in the lower U.S. court, before U.S. District Judge Stephen V. Wilson in Los Angeles.

Sharman also has filed a countersuit accusing entertainment companies of violating antitrust laws by stopping Sharman and its partner from distributing authorized copies of music and movies through Kazaa. A ruling on the countersuit is expected in early January.

Sharman is incorporated in the South Pacific island nation of Vanuatu with main offices in Sydney, Australia.

Buma/Stemra said it regretted the court hadn’t dealt with the broader issue of the legality of file-sharing programs, leaving the group in a similar position as the American recording industry, which has sued individual song-swappers for tens of thousands of dollars in damages.

“We now have the unpleasant situation that only the consumers who swap music can be held accountable for copyright violation,” said Cees van Rij, the head of legal affairs at Buma/Stemra.

But Buma/Stemra spokeswoman Noortje de Bakker said the agency hoped it wouldn’t have to take similar action in the Netherlands. She said the group was promoting the use of paid alternatives such as Apple Computer Inc.’s iTunes Music Store, MusicMatch, Rhapsody and the revamped, legal Napster.

The IFPI, an organization representing the international recording industry, called the Dutch ruling a “flawed judgment, but still leaves no doubt that the vast majority of people who are using file-swapping services like Kazaa are acting illegally whatever country they are in.”

The IFPI said the ruling is based on a “one-sided presentation of the facts” by Kazaa. It said that because Kazaa is able to control and filter user content, it should “be held responsible for infringements taking place on its service.”

– Associated Press

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