File-Sharing Sites’ New Tune

Stung by the Grokster shutdown, other music services such as eDonkey are scrambling to find partners with legitimate businesses
After years of costly litigation, the music and movie industries hammered what looked like the last nail in the coffin of online file-sharing service Grokster. It has shut its Web site, halted downloads of its file-sharing software, and agreed to pay $50 million to settle a lawsuit that accused Grokster of helping users illegally share copyrighted songs and movies.

Under terms of the agreement announced Nov. 7, Grokster could resume business once it comes up with an alternate strategy that compensates copyright owners. For now, Grokster’s site contains only a curt message: “There are legal services for downloading music and movies. This service is not one of them.” A lawyer for Grokster declined to comment.

The settlement caps the victory won by film and recording industries on June 27, when the U.S. Supreme Court ruled unanimously that Grokster and another file-sharing service, StreamCast, showed a clear intent to facilitate illegal activity. The decision by the high court paved the way for media heavyweights to sue in a bid to halt piracy.

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