Music industry suffers in court
As one of the most powerful segments of the content business, the music industry does not hesitate taking court action when it feels slighted. Nothing raises its ire more than downloading and file-sharing. And typical of industries in decline or serious need of restructuring its legal battles tend to be business negotiations by other means.
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Medias growth engine is the World Wide Web. Not a month goes by without another fact-filled report citing evidence that consumers really like accessing media content through the internet. Not a nano-second goes by without another industry that once made lots of money through traditional media attempting a new extortion on the internet.
Last week (Wednesday August 15) Judge Yekaterina Sharapova of the Cheremushkinsky District Court in Moscow dismissed a lawsuit against Denis Kvasov, former operator of now banned music download site AllofMP3, brought by local prosecutors for copyright infringement at the request of music companies.
International Federation of the Phonographic Industry (IFPI), facing the dismissal as “extremely disappointing,” wants the World Trade Organization (WTO) to pick up the ball and punish Russia as well as send a loud and clear message to one and all that they set music prices and royalty payment rates. These are the same people who have effectively put their last cash-cow – music retailers – out of business by denying the economic reality of price elasticity. Recently the US music industry successfully lobbied for increased royalty terms for internet radio stations, threatening to put most out of business.
Before Russian authorities shutdown AllofMP3 – and credit card companies stopped servicing payments to it – downloaders could buy music tracks for US$0.10 and entire albums for US$1, roughly one-tenth the price charged by iTunes and other authorized (read:Western) music sites. Kvasov’s company MediaServices, owner of AllofMP3, paid royalties to the Russian rights collecting society ROMS but IFPI refused to accept transfer payments. Judge Sharapova mentioned “the sloppy job done by prosecutors in collecting and analyzing the facts.”
Another legal “sloppy job” hit the proverbial fan last week in the US State of Oregon where the Record Industry Association of America (RIAA) will face a judge under the infamous Racketeer Influenced and Corrupt Organizations (RICO) Act. The maximum sentence under Federal RICO statues, bestowed liberally to bad guys, is 100 years without the possibility of parole. To quote singer Alanis Morissette: “Ooh, this could get messy.”
 RIAA prosecuted Oregon resident Tanya Anderson in 2005 for illegal downloading. Anderson – a disabled single mother – maintained her innocence. The case was “dismissed with prejudice” – it cannot be filed again. The court found that neither she nor her 10 year old daughter downloaded gangsta rap tracks, as alleged by RIAA’s unlicensed private investigators who once posed as the 10 year olds grandmother on the telephone to attempt to extract incriminating information.
She’s not finished with the RIAA. Last week Anderson countersued in US Federal Court for malicious prosecution, seeking to have the suit elevated to class action status. If the courts allow, everyone previously sued by RIAA will get a quite different day in court.
The suit charges RIAA, its private investigator and several music companies with “negligence, fraud, negligent misrepresentation, federal and state RICO, abuse of process, malicious prosecution, intentional infliction of emotional distress, violation of the Computer Fraud and Abuse Act, trespass, invasion of privacy, libel and slander, deceptive business practices, misuse of copyright law, and civil conspiracy.”
Content rights holders are entitled to compensation. To this, there is no argument. But terms of that compensation must be mutually agreed by providers and users. Threats are not part of negotiation; they are corrupt practices. - August 20, 2007
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