Music-swapping site Grokster to shut down under settlement
Nov 07 3:27 PM US/Eastern

Grokster, the free music-swapping website that prompted a legal battle
ending in the US Supreme Court, agreed to shut down its service under a
settlement with the US music industry, industry officials said.

Grokster will shut down its peer-to-peer (P2P) network that had been accused
of massive copyright violations, prompting a lawsuit that ended with the
highest US court ruling that it contributed to piracy, according to the
Recording Industry Association of America (RIAA).

"This settlement brings to a close an incredibly significant chapter in the
story of digital music," said Mitch Bainwol, chairman and chief executive of
the RIAA.

"This is a chapter that ends on a high note for the recording industry, the
tech community and music fans and consumers everywhere. At the end of the
day, this is about our ability to invest in new music. An online marketplace
populated by legitimate services allows us to do just that."

The RIAA, which spearheaded the legal effort against P2P networks, said a
consent agreement would be presented to court.

"The settlement includes a permanent injunction prohibiting infringement --
directly or indirectly -- of any of the plaintiffs' copyrighted works," said
the RIAA in a joint statement with the National Music Publishers

"This includes ceasing immediately distribution of the Grokster client
application and ceasing to operate the Grokster system and software."

In June, US Supreme Court ruled networks such as Grokster may be held liable
for infringement if they encourage people to make unauthorized copies of
copyrighted songs, films or other content. This opened the door for the
music industry to pursue damages.

"The owners and operators of Grokster -- like numerous other online services
all across the globe -- heard nine US Supreme Court justices speak in a
unanimous voice -- a voice that was heard loud and clear," Bainwol said.

"As the court articulated in no uncertain terms, there is a right way and a
wrong way to conduct a business. This settlement makes clear that businesses
are well aware when they are operating on the wrong side of that line."

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