Kazaa Pays $100 Million to Settle Lawsuit

The music and movie industries have reached a legal settlement with their longtime antagonist Kazaa, one of the world’s best known file-sharing networks and a once-popular source of illicit downloads. Under the terms of the deal, Kazaa’s owner Sharman Networks will pay the world’s four major music companies - Universal Music, Sony BMG, EMI and Warner Music - more than $100 million and commit to going legitimate, according to the International Federation of the Phonographic Industry. “There are very substantial damages being paid - in excess of $100 million - and Kazaa will go legal immediately. They’ve had time to prepare for this,” said IFPI Chairman and Chief Executive John Kennedy. The Motion Picture Association of America said Sharman “will continue operations while employing new technologies to prevent unauthorised distribution of copyrighted works on its system.” Terms of the MPAA’s settlement were not immediately available. Two suits were settled as part of the agreement: one in Australia, where a judge had already ruled that the company breached copyright; and another in California, in which Kazaa creators Niklas Zennstrom and Janus Friis were named as co-defendants. Zennstrom and Friis, who sold Kazaa to Sharman Networks in 2002, later went on to create the popular Internet telephony software Skype, which they sold to eBay last year for an initial $2.6 billion in cash and stock. Zennstrom and Friis have now reached into their own pockets to help settle the music and movie industry lawsuit.