LimeWire, the file-sharing site shut down by order of a federal judge last October, and its former Chief Executive Mark Gorton, have agreed to pay $105 million to settle claims that the company encouraged users to illegally share copyrighted songs online. The settlement is the latest development in an ongoing fight between the music industry and a host of online companies that have cropped up since the original Napster software opened the floodgates for digital music piracy in 1999.
LimeWire last year lost a court battle with music labels when U.S. District Court Judge Kimba Wood ruled that the company and its CEO were liable for infringing the copyrights of major record companies. This opened the way for the labels to seek damages. The company’s software, which had been downloaded 200 million times, was designed to induce users to violate copyrights, Judge Wood ruled. The recent settlement with Warner Music Group and Sony Corp.’s Sony Music Entertainment is among the largest paid by a file-sharing company. In 2006, Kazaa paid music and movie companies $115 million to settle its lawsuits.
In the months following LimeWire’s forced shutdown, the percentage of people in the U.S. who used file-sharing services fell to 9% in the fourth quarter of 2010, down from 16% three years earlier, according to a survey by the NPD Group, a market research firm. But the study noted that the drop could be temporary since former LimeWire users seek alternatives, including Frostwire and BitTorrent.
Source: Los Angeles Times
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