Despite Court ruling, file sharing still thrives

By Alex Veiga

updated 7:14 p.m. ET June 30, 2006

LOS ANGELES - File-swapping software seemed in peril a year ago when the U.S. Supreme Court gave the entertainment industry a legal bullet: Its ruling reopened the door for lawsuits over programs used to share music, movies and other copyright files.

The Supreme Court, reversing lower court rulings, said developers of such programs could indeed be held liable for unauthorized sharing by their users — if the technology companies were somehow encouraging customers to steal music and movies.

Andrew Lack, then chief executive at Sony BMG Music Entertainment, predicted at the time: "We will no longer have to compete with thieves in the night whose businesses are built on larceny."

Yet a year later, peer-to-peer, or P2P, sharing continues to thrive, with firms behind favorite applications such as eDonkey, LimeWire, Morpheus and Kazaa, among others, still in business.

Although the threat of litigation did force the operators of BearShare, WinMX and i2Hub to shut down, the number of people using file-sharing services has gone up.

The average number of simultaneous file-sharing users was about 9.7 million worldwide in May, with about 6.7 million from the United States, according to BigChampagne LLC, which tracks file-sharing activity. In the same period last year, BigChampagne tracked 8.6 million average users globally and 6.2 million in the United States.

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