THE music industry hailed a victory in the battle against illegal downloading yesterday after forcing one of the world’s most prominent file-sharing sites to pay $100 million in damages and become a legal business.Kazaa, a longstanding source of illicit music and film downloads, enjoyed 4.2 million simultaneous users worldwide. The “peer-to-peer” network acted as a free jukebox, making files accessible to any computer user. In 2003 Kazaa became the most downloaded software with 239 million.

Sharman Networks, which is based in Australia and is the owner of Kazaa, agreed yesterday to pay the world’s four leading music companies — Universal, SonyBMG, EMI and Warner Music — more than $100 million (£54 million) in compensation for lost sales.

Kazaa had been under mounting pressure after a series of landmark court rulings, instigated by the music and film industries. Australia’s Federal Court found Sharman Networks guilty of encouraging its users to swap songs illegally, breaching copyright law. In June last year the US Supreme Court ruled that file-sharing companies could be held accountable for promoting copyright theft by users of their services.

http://www.timesonline.co.uk/article/0,,26909-2288888,00.html