Editor 30-Mar-03 - upd 12-May-03
The RIAA Comes for You

Recent court cases greatly increase the danger to your business presented by "file-sharing" systems.




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The RIAA (Recording Industry Association of America) and MPAA (Motion Picture Association of America) have just lost quite spectacularly in court. They attempted to get a judgment that so-called "file-sharing" systems, in particular Grokster and Morpheus, are guilty of copyright infringement.

U.S. District Court Judge Stephen Wilson followed precedent from the famous "Betamax Case" and ruled the services do not violate copyright, even though many people use those services to violate copyrights (A1). Legal experts expect this ruling will be upheld on appeal.

So, how does the fact these have been declared "legitimate services" increase the risk to your business? Unable to block the transport, the RIAA and MPAA will increasingly go after the source, the people who "share" copyrighted content, and owners of networks "shared" content is hosted on.

Much content in violation is hosted on business networks that have high speed Internet connections. File-sharing is a two way street - users download files, usually music and videos, for free from other participants, but are expected to offer files on their own machine for download by others. Most of these files are copyrighted content offered illegally.

I'm currently seeing about 20% of my clients' machines have KaZaA or another file-sharing program installed and configured to start automatically at boot (though not all are offering files for download),

A million dollar payment has already been made by one company to avoid facing the RIAA in court (A2). The RIAA is actively filing lawsuits against individuals, universities and business, with claims as high as $98 billion (A3). The initial claim is calculated by multiplying the number of titles offered by $150,000 each, the maximum penalty allowed by law. This allows plenty of room for negotiating down to a suitable level of pain.

While the RIAA / MPAA currently concentrate on major perpetrators, just as with the BSA (Business Software Alliance), I expect they will start targeting small offenders just to show that "no-one is immune". [update 1-May-03 - oops, they're already doing that (A10).] Negotiating down from $150,000 per song, this is clearly a self financing proposition.

Add to all this the recent RIAA / MPAA legal victory over Verizon. The court has ruled Verizon's ISP (Internet Service Provider) must turn over to the RIAA / MPAA on request the names and addresses of persons or businesses hosting copyrighted content. This will make it far easier to prosecute people for participating in file-sharing networks.

Other Risks from File-Sharing

Aside from getting sued by the RIAA, file-sharing provides plenty of other risks for your business:

  • Music and video files are huge compared to normal business traffic. Employees downloading these files to your network and others downloading them from your network can easily swamp your Internet connection, reducing productivity for legitimate business uses.
  • I am continuously asked by business managers if I can increase hard disk space on business computers. In most cases I find far more than enough disk space for business use, but it's all been taken up with music files and pornographic videos.
  • Music files are no longer the only type of files these services transfer. An accidentally (or deliberately) misconfigured file-sharing program can result in confidential business files being available on the Internet.
  • Files offered for download can easily be faked, causing employees to download worms and trojan programs (A5). Trojans are now being implanted by "spammers" so they can use your computers to hide the source of bulk email (A8). This can load down your computers and internet connection and could cause your ISP to cut off your Internet service, or cause your business to be attacked by "anti-spam" zealots.

    [Update 12 May 03] The new Fizzer Worm is transmitted by both email and the popular KaZaA file-sharing program (A11). Fizzer includes a keystroke logger (to capture passwords) and a trojan program that allows remote control of an infected computer. Anti virus vendors rate Fizzer as a serious risk because it is spreading aggressively.[end Update]

  • Nothing "free" is ever really free in the world of commerce, and "free" file-sharing services aren't either. They deliver adware / spyware to your computers, (A7) and even programs that make your expensive computing resources available for use by other companies (A6). I am seeing a lot of computers bogged down and made unstable by adware / spyware parasites.
  • The risk of sexual harassment suits resulting from employees downloading pornography is well known. File-sharing systems offer opportunity for both deliberate and accidental downloading of pornographic content.
  • Additional load on computers, from downloading, uploading and playing music and video files can result in loss of productivity and continuous demands for newer, faster computers not justified by legitimate business needs.

Some, but by no means all, of these problems can be alleviated with a properly configured hardware firewall. Personally, I don't trust "personal" firewalls (Norton and the like) because I see no reason why a trojan program, working from within, can't disable or bypass them.


"Sharing" copyrighted content without permission of the copyright holder is "misappropriation", a fancy word for theft. Theft is not generally considered ethical (except by top corporate executives and college students). Many rationalizations have been invented by which people attempt to convince themselves they aren't really stealing.

Is copyright law wrong or obsolete? Is intellectual property an invalid concept? Some argue for those positions, but the fact remains, the creator of the work created it under the expectations of current copyright law. Violating that law is a violation of the livelihood of the creator of the work (who might otherwise have chosen to sell insurance).

Many say availability of free downloads actually increases legitimate sales of CDs, so it's good for the industry, which may or may not be true. Unfortunately it doesn't change certain technicalities. Rampant piracy sold a lot of Microsoft software too, but I wouldn't try using that as an excuse when the BSA comes calling.

Many claim that if something is so easy to steal, it's not really stealing. "They can't stop the progress of technology" is another popular rant. It's easy to break a window (using established technology), so stealing stuff from a home is not actually stealing either?

Are record executives unethical parasites who are themselves thieves by overpricing CDs? That's a really easy position to take, but the fact remains, they have created something the public wants enough to steal, thus they must provide a valuable service. Further, they do reward the artists and production crews who create the work infinitely better than the file-sharing services do - a pittance is infinitely greater than nothing.

Napster, the original file-sharing system, set the precedent of giving no thought whatever to compensating artists and production crews for their work. The only thought was how much money could be raked off in the process of fencing stolen goods to thieves. Napster's users had no thought whatever but to amass vast amounts of top artists' music without paying the artists, production crews, or anyone else for it. None of this has changed.

The Future

Markets are being changed radically by new forms of distribution (A12). Those who grew wealthy and powerful under the old system seek to retain that wealth and power under new conditions. Unfortunately for everyone, including themselves, they have chosen to fight rather than adapt. This is a losing battle, but the fighting of it it will cause a lot of problems for everyone.

Projecting current trends, it's easy, nearly inevitable, to make a case for a rather bleak future. The RIAA / MPAA will continue to buy influence with legislators to pass draconian laws that take from all Americans freedoms once taken for granted. Super DMCA is certainly not the end of the matter.

RIAA / MPAA robots will tirelessly patrol the Internet looking for copyright violators, like in some bad science fiction movie. The anonymity of the Internet will be progressively stripped away until you have to provide positive identification just to log on.

Microsoft, Intel and AMD are already arrayed on the side of repression in the name of "security", with Palladium and similar schemes. Your computer will run what they want it to run and nothing else. "Unprotected" equipment will not be able to access desired content and may even be made illegal - watch for Microsoft to push for that.

Within the the U.S. and treaty countries, real and imagined copyright violators will be be descended upon by law enforcement with a "guilty until proven innocent" attitude. I wouldn't even be surprised if the Department of State gave permission to directly hack sites in "uncooperating" countries. None of this will stop the thieving.

What is actually needed is for those who object to RIAA / MPAA control of their entertainment content to create a new means of distribution that delivers content at substantially lower cost and rewards the artists and creative talent at a substantially higher rate than the old distribution system. New acts and new authors will be attracted to the new system and not sign with the old.

I have seen just about zero effort in this direction. So strong is the feeling among the uncreative that all the work of the creative should be free to them, it will be impossible to finance such an effort. Further, the majority are only interested in the stars the media moguls have made and promoted, and will have no other. It's just too bad the rest of us will have to suffer the repression this whole mess is generating.


Every business should publish a company policy regarding file-sharing services, and that policy should be enforced consistently and uniformly. A Human Resources consultant can help with this. Computers should be examined periodically for downloaded music and videos, which should be removed immediately. They're big, so they're easy to find.

Important: The mere presence of music files on a PC does not prove an employee is doing something illegal. "Fair use" allows copying purchased music for personal use, and some download sites specialize in music where the copyright owner specifically allows downloading (A9) - some free and some for a fee. The problem for a business manager is that it's impractical to tell what's legal and what isn't.

Presence on a machine of a file-sharing program, however, such as KaZaA, Morpheus, Grokster, Sharman, Aimster and others is a good indicator that at least some of the files on a computer are likely to be infringing.

There are many reasons to use a computer for manipulating and playing music in a home setting, but doing so on business computers attached to the office network is problematic. There are plenty of CD players and other devices available for that purpose.

- Andrew Grygus

Additional Reading

©Andrew Grygus - Automation Access - www.aaxnet.com - aax@aaxnet.com
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