Major Labels Ending Lawsuits Against Individuals…. Now What?

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Major labels are now discontinuing their multi-year, legal attack against individual file-swappers, according to information confirmed by the RIAA on Friday.

The RIAA-coordinated campaign, first started in 2003, has largely failed to stem file-sharing volumes, while producing massive public relations issues and burning millions in courtroom costs.

According to agreement details shared with Digital Music News, alternative plans are now being pursued with various ISPs in the United States.  The reshaped agreements call for ISPs to start issuing warnings and eventually, terminations, to infringing subscribers.

The RIAA pointed to confidential negotiations, and nothing has been separately confirmed by ISPs.  Some discussions are being facilitated by New York attorney general Andrew Cuomo, a broader forum that may also include the motion picture industry.  “Attorney General Cuomo became involved in helping facilitate conversations during the summer,” RIAA representative Jonathan Lamy said on Friday.  “This has been a months-long process.”

That leaves a lot of open questions, especially in the absence of above-board, joint announcements with ISPs.  Is everyone on board?  And, are ISPs willing to play bad cop against their own, paying customers?

Major labels are accustomed to that sort of attack, but ISPs are undoubtedly considering their next steps wisely.  “Once you start going down the path of looking at the information going down the network, there are many that want you to play the role of policeman,” Verizon executive vice president of public affairs Thomas J. Tauke told the New York Times earlier this year.  “Stop illegal gambling offshore. Stop pornography. Stop a whole array of other kinds of activities that some may think inappropriate.”

Other questions are also lingering.  Once the claimed agreements start rolling, the exact processes for handling suspected file-swappers remains unclear.  The RIAA pointed to a graduated response, one that will ultimately result in terminated accounts.  Access providers have previously resisted those initiatives, and digitally-focused civil liberties groups like the Electronic Frontier Foundation (EFF) are likely to fight the actions.  Consumers may also fight back, especially those falsely accused of file-swapping across shared, wireless connections.

Perhaps one thing is clear – the carnage is bloody in the rearview mirror.  In total, the RIAA has sued more than 35,000, often through complicated, “John Doe” procedures designed to circumvent ISP-driven privacy protections.  Ongoing lawsuits will be finalized, though fresh suits will not be issued except for egregious, selected situations, according to the trade group.  The majors will also stop pursuing lawsuits against university students, the subject of an entirely different theater of negotiations.  “We stopped filing new lawsuits in August of this year,” Lamy continued.

On that matter, attorney Ray Beckerman found suits filed earlier this month, raising questions of exactly when the actions are being terminated.  “We have learned that a number of suits have been brought by the RIAA, some as recently as last week,” Beckerman explained.

The development follows a serious plunge in album sales in the United States – and abroad, for that matter.  During the past three months, album sales have dropped more than 20 percent year-over-year, driven mostly by physical product declines.  That, coupled with fresh challenges from parties like Harvard University Law School, are undoubtedly influencing the changed path.

The game is clearly changing, but the rules, battles, and players involved are difficult to predict.  Additionally, as the news filters down to music fans, file-sharing volumes could spike upward.  Ahead of the shutdown of Napster, file-swapping actually boomed, the first of many disruptive chapters still being written.

Report by publisher Paul Resnikoff.