Monday, June 22, 2009

$1.9 Million Verdict for Illegal Music Downloads

Friday's news saw the announcement of a $1.9 million verdict against Jammie Thomas-Rasset, a Minnesota mother of four, for illegal music downloads. The woman swapped songs on the Kazaa Internet network. Vivendi S.A. and other music vendors brought the case over 24 specific songs. The federal jury awarded $80,000 per song, for songs including “Iris” by the Goo Goo Dolls and “Welcome to the Jungle” by Guns ‘n Roses. The music companies claim that sales have declined not just because of bootleg CD's, but also due to illegal downloads. Apparently, the jury agreed. The Thomas-Rasset is the first of many similar cases to go to trial. The first trial in the Thomas-Rasset resulted in a verdict of $220,000, but was retried due to faulty jury instructions. The size of the second verdict is sure to be a contentious issue.

Does this case have longer term implications for music sharers? Does this send a message to people who think that they will not get caught? The Recording Industry Association of America is concerned not only with illegal downloading, but also with protection of intellectual property worldwide. The Congressional International Anti-Piracy Caucus put together a 2009 Caucus "Watch List" of countries with serious copyright piracy that includes China, Russia, Canada, Spain and Mexico. Surely, in tough economic times, all business sectors are more apt to "circle the wagons" to protect their income stream to the greatest extent possible. Copyright violations have been a hot spot for some time now, with many believing that it is not stealing at or at least not bad stealing.

There seem to be two possible outcomes. First, lack of protection may stifle creativity and innovation resulting in fewer works because there is not sufficient money to be made. That is, artists may just decide to do something else. Second, the cost paid for copyrighted materials by those who pay rather than download at "no cost" may increase to subsidize the "free riders" such as Thomas-Rasset. Like any regulatory system, there must be a sufficient enforcement mechanism to catch those who violate the rules or least substantially violate the rules. So long as consumers believe that there is no likely penalty for illegal downloads and piracy, the RIAA will have a busy time litigating.


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