One of the internet world's most popular hobbies - exchanging music and films online - was facing Armageddon yesterday after the US supreme court unexpectedly ruled unanimously against two of the main companies facilitating it. The ruling in Grokster v MGM overturned previous judgments in lower courts raising speculation that filesharing as presently understood may soon experience a painful death. However, closer interpretation of the ruling shows that it was not a simple case of a Bush-leaning court swallowing the arguments of the music and film corporations. The court accepted that filesharing was used for exchanging documents and literature that was out of copyright, but also found that Grokster and codefendant StreamCast not only knew that their service was overwhelmingly used for illegal downloads, but were actively exploiting that fact by earning money from advertising revenues arising from downloads, and even giving advice to users who had problems running illegally downloaded material. This made it different, they argued, from the oft-quoted precedent of Sony, then the sued though now the suer, which had successfully argued that video recorders were primarily for "time-shifting" programmes for later viewing, despite being used for illegal transfers.
It is not yet clear what effect yesterday's judgment will have on the daddy of all the filesharers, BitTorrent, which is reckoned to account for 30% of all data sent down the internet. This is because BitTorrent - a conduit for downloading films, music and TV programmes - adopts a low profile and does not evangelise. What is clear is that the corporations have got a green light to sue Grokster-style companies, as well as making examples of child downloaders by suing their parents, as they have done in a series of high-profile cases.
What next? The Groksters of this world could move offshore to escape US law or shake down their activities to become supreme court friendly, or do as Napster did after it was sued and reinvent itself (after being sold) as a legal downloader. The music and film industries should think carefully before using this judgment as a weapon of mass destruction that could kill the huge opportunities opened by these new technologies. As the success of Apple's iTunes has proved, if there is a "fair" legal method of downloading, most people will accept it. If the corporations had spent as much time developing accommodating technologies as they have prosecuting miscreants, the outlook would be a lot brighter than it is now.
