Kazaa 'worried about piracy'

SYDNEY - Kazaa, the internet's most popular file-swapping system, told a court in Sydney yesterday that it was worried about users exchanging unauthorised files and had held talks with record companies in the United States.

Thirty record companies are suing Kazaa's Australian owners and developers, Sharman Networks and Altnet, claiming Kazaa has cost them millions of dollars in lost sales.

Philip Morle, Sharman's director of technology, told the Federal Court that the Distributed Computing Industry Association had hosted discussions between Sharman and various US record companies.

Sharman says it has no control over what the 100 million network users do with its software or what files they swap.

The record companies allege Kazaa is responsible for copyright infringement and has conspired to harm the industry unlawfully.

Final evidence and closing arguments are expected to be presented next week. Federal Court Justice Murray Wilcox is not expected to hand down his verdict until early next year, but has said Kazaa would not be ordered to shut down.

The case echoes the 2001 shutdown of Napster, and follows a court decision in the Netherlands last year that cleared Kazaa's software of liability for copyright infringement.

The music companies suing include the local arms of Sony BMG Music Entertainment, EMI Group, Warner, Universal Music and several Australian firms.

Recorded music sales have tumbled in recent years, with global sales down 7.6 per cent last year to $32 billion, according to the International Federation of the Phonographic Industry.

The federation has blamed rampant piracy, poor economic conditions and competition from video games and DVDs for the slump.

Supporters of file swapping argue that it can encourage people to buy music by exposing them to a range of styles and tastes.

- REUTERS