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Last Updated: Monday, 29 November, 2004, 11:35 GMT
Australian labels sue Kazaa owner
Screen grab of Kazaa's website
Record labels are suing the firm behind leading file-swapping software Kazaa, in the latest round of the fight over copyright.

Sharman Networks, based in Australia but registered in the Pacific island state of Vanuatu, is being sued along with nine other firms.

In court, the labels dubbed Kazaa "an engine of copyright piracy to a degree of magnitude never before seen".

Sharman says it has no control over what users do with the files they swap.

The labels behind the case are EMI, Warner, Sony BMG and Universal, as well as a number of Australian record companies.

Their lawyer, Tony Bannon, told the judge in Sydney's Federal Court that 100 million users swapped 3 billion files a month - and that Sharman was both making it easy for them to find illicit music and profiting from it by selling adverts on its website.

The industry raided Sharman's offices as well as those of several other companies in February in the search for evidence to support the suit.

Sharman opens its defence on Tuesday.

Legal battlefield

The case in Australia is the second in which Kazaa has been targeted. The software was cleared of liability for copyright infringement in the Netherlands in December 2003.

The firm is not the first file-sharing software provider to find itself in the firing line.

Grokster and Streamcast have both been sued in the US but were cleared of being liable for file-sharing. Judges ruled there were substantial legal uses for their software.

The major labels are appealing that decision, and continue to sue individuals for downloading copyrighted material or making it available online.

Online sales

Despite the defeats elsewhere, the recording and film industries are keen to keep making the argument that file-sharing software is responsible for the industry's financial troubles.

Unit sales of recorded music have fallen in recent years, and the industry says file-swapping is to blame.

Critics argue that file-sharing can in fact encourage music purchases by allowing people to hear material they could not find on radio, pointing to the growing popularity of online music stores such as Apple's iTunes.

They also note that in terms of recreational spending by young people, music now has to vie with DVDs, computer games and the cost of running a mobile phone.

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