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File Sharing Site Settles FTC Charges

May 30, 2006
A company that advertised that membership in its Web site would allow users of peer-to-peer (P2P) file-sharing programs to transfer copyrighted materials without violating the law has agreed to settle Federal Trade Commission charges.

The FTC says that mp3downloadcity.com's claim that its service was 100 percent legal was 100 percent false.

The settlement bars misrepresentations about P2P file-sharing products or services, requires that the operator disclose the civil and criminal liability risks of downloading copyrighted material without the owner's permission, and requires that the operator refund more than $15,000 to the customers he duped into buying memberships.

In September 2005, the FTC filed suit in federal court charging that Cashier Myricks used his mp3downloadcity.com Web site to market and sell a tutorial and referral service that promoted the use of P2P file-sharing software programs to download digital music, movies, and computer games.

Unlike a licensed subscription service, the defendant's service did not provide its paying customers with a license to download and share copyrighted music, movies, or games. Instead, for $24.95, the defendant instructed consumers on the use of free P2P file-sharing software provided by others.

According to the FTC's complaint, consumers were lured to become members by deceptive claims that subscribing to the defendant's service made P2P file sharing "100% legal."

According to the FTC complaint, the defendant's customers who used P2P file-sharing programs to download copyrighted material, or who made it available to others, without the copyright owner's permission, were engaged in copyright infringement that could subject them to civil and criminal liability. The court ordered a temporary halt to the deceptive claims.

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