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United States

US Sues Adobe Over Subscription Plan Disclosures (cnbc.com) 54

The U.S. government on Monday sued Adobe, accusing the maker of Photoshop and Acrobat of harming consumers by enrolling them in its most lucrative subscription plans without clearly disclosing important terms. From a report: In a complaint filed in the San Jose, California, federal court, the government said Adobe failed to adequately disclose hefty early termination fees, sometimes reaching hundreds of dollars, when customers sign up for "annual, paid monthly" subscription plans.

The government said Adobe hides important terms in fine print and behind textboxes and hyperlinks, clearly discloses the fees only when subscribers try to cancel, and makes canceling an onerous and complicated process.

The Courts

Google Loses Bid To End US Antitrust Case Over Digital Advertising (reuters.com) 4

An anonymous reader quotes a report from Reuters: Alphabet's Google must face trial on U.S. antitrust enforcers' claim that the internet search juggernaut illegally dominates the online advertising technology market, a federal judge ruled on Friday. U.S. District Judge Leonie Brinkema in Alexandria, Virginia, denied Google's motion during a hearing, according to court records. Google had argued for a win without a trial, saying that antitrust laws do not block companies from refusing to deal with rivals and that regulators had not accurately defined the ad tech market. Court papers did not specify what reasons the judge provided at the hearing. Motions like the one Google filed are only granted where a judge determines there is no factual dispute to send to trial. Last year, the U.S. Justice department and eight states sued Google, calling for the break up of the search giant's ad-technology business over alleged illegal monopolization of the digital advertising market.
The Almighty Buck

Visa, Mastercard $30 Billion Fee Settlement in Peril (yahoo.com) 15

Visa's and Mastercard's proposed $30 billion antitrust settlement to limit credit and debit card fees for merchants is in peril, after a New York judge signaled she was preparing to reject the accord. From a report: U.S. District Judge Margo Brodie in Brooklyn told lawyers for the card networks and objectors at a hearing on Thursday that she will "likely not approve the settlement," according to court records.

She plans to write an opinion explaining her decision and reasoning. Both card networks said they were disappointed. Mastercard called the settlement a "fair resolution" that gave businesses more flexibility in managing card transactions, and Visa called it an "appropriate resolution" to the nearly 19-year-old case.

AI

Clearview AI Used Your Face. Now You May Get a Stake in the Company. (nytimes.com) 40

A facial recognition start-up, accused of invasion of privacy in a class-action lawsuit, has agreed to a settlement, with a twist: Rather than cash payments, it would give a 23 percent stake in the company to Americans whose faces are in its database. From a report: Clearview AI, which is based in New York, scraped billions of photos from the web and social media sites like Facebook, LinkedIn and Instagram to build a facial recognition app used by thousands of police departments, the Department of Homeland Security and the F.B.I. After The New York Times revealed the company's existence in 2020, lawsuits were filed across the country. They were consolidated in federal court in Chicago as a class action.

The litigation has proved costly for Clearview AI, which would most likely go bankrupt before the case made it to trial, according to court documents. The company and those who sued it were "trapped together on a sinking ship," lawyers for the plaintiffs wrote in a court filing proposing the settlement. "These realities led the sides to seek a creative solution by obtaining for the class a percentage of the value Clearview could achieve in the future," added the lawyers, from Loevy + Loevy in Chicago.

Anyone in the United States who has a photo of himself or herself posted publicly online -- so almost everybody -- could be considered a member of the class. The settlement would collectively give the members a 23 percent stake in Clearview AI, which is valued at $225 million, according to court filings. (Twenty-three percent of the company's current value would be about $52 million.) If the company goes public or is acquired, those who had submitted a claim form would get a cut of the proceeds. Alternatively, the class could sell its stake. Or the class could opt, after two years, to collect 17 percent of Clearview's revenue, which it would be required to set aside.

Security

Fired Employee Accessed NCS' Computer 'Test System' and Deleted Servers (channelnewsasia.com) 63

An anonymous reader quotes a report from Singapore's CNA news channel: Kandula Nagaraju, 39, was sentenced to two years and eight months' jail on Monday (Jun 10) for one charge of unauthorized access to computer material. Another charge was taken into consideration for sentencing. His contract with NCS was terminated in October 2022 due to poor work performance and his official last date of employment was Nov 16, 2022. According to court documents, Kandula felt "confused and upset" when he was fired as he felt he had performed well and "made good contributions" to NCS during his employment. After leaving NCS, he did not have another job in Singapore and returned to India.

Between November 2021 and October 2022, Kandula was part of a 20-member team managing the quality assurance (QA) computer system at NCS. NCS is a company that offers information communication and technology services. The system that Kandula's former team was managing was used to test new software and programs before launch. In a statement to CNA on Wednesday, NCS said it was a "standalone test system." It consisted of about 180 virtual servers, and no sensitive information was stored on them. After Kandula's contract was terminated and he arrived back in India, he used his laptop to gain unauthorized access to the system using the administrator login credentials. He did so on six occasions between Jan 6 and Jan 17, 2023.

In February that year, Kandula returned to Singapore after finding a new job. He rented a room with a former NCS colleague and used his Wi-Fi network to access NCS' system once on Feb 23, 2023. During the unauthorized access in those two months, he wrote some computer scripts to test if they could be used on the system to delete the servers. In March 2023, he accessed NCS' QA system 13 times. On Mar 18 and 19, he ran a programmed script to delete 180 virtual servers in the system. His script was written such that it would delete the servers one at a time. The following day, the NCS team realized the system was inaccessible and tried to troubleshoot, but to no avail. They discovered that the servers had been deleted. [...] As a result of his actions, NCS suffered a loss of $679,493.

The Courts

Chemical Makers Sue Over Rule To Rid Water of 'Forever Chemicals' (thehill.com) 101

An anonymous reader quotes a report from the New York Times: Chemical and manufacturing groups sued the federal government late Monday (Warning: source paywalled; alternative source) over a landmark drinking-water standard that would require cleanup of so-called forever chemicals linked to cancer and other health risks. The industry groups said that the government was exceeding its authority under the Safe Drinking Water Act by requiring that municipal water systems all but remove six synthetic chemicals, known by the acronym PFAS, that are present in the tap water of hundreds of millions of Americans. The Environmental Protection Agency has said that the new standard, put in place in April, will prevent thousands of deaths and reduce tens of thousands of serious illnesses. The E.P.A.'s cleanup standard was also expected to prompt a wave of litigation against chemical manufacturers by water utilities nationwide trying to recoup their cleanup costs. Utilities have also challenged the stringent new standard, questioning the underlying science and citing the cost of filtering the toxic chemicals out of drinking water.

In a joint filing late Monday, the American Chemistry Council and National Association of Manufacturers said the E.P.A. rule was "arbitrary, capricious and an abuse of discretion." The petition was filed in the Court of Appeals for the District of Columbia. In a separate petition, the American Water Works Association and the Association of Metropolitan Water Agencies said the E.P.A. had "significantly underestimated the costs" of the rule. Taxpayers could ultimately foot the bill in the form of increased water rates, they said. PFAS, a vast class of chemicals also called per- and polyfluoroalkyl substances, are widespread in the environment. They are commonly found in people's blood, and a 2023 government study of private wells and public water systems detected PFAS chemicals in nearly half the tap water in the country. Exposure to PFAS has been associated with developmental delays in children, decreased fertility in women and increased risk of some cancers, according to the E.P.A. [...] The E.P.A. estimates that it would cost water utilities about $1.5 billion annually to comply with the rule, though utilities have said the costs could be twice that amount.
Further reading: Lawyers To Plastic Makers: Prepare For 'Astronomical' PFAS Lawsuits
IT

Rivals and Legal Action Cast Shadows Over Windows on Arm Market 24

Qualcomm faces potential disruption to its Windows on Arm laptops due to a legal battle with Arm, while MediaTek prepares to enter the market. Qualcomm's exclusivity deal with Microsoft for Copilot+ PCs, based on its Snapdragon SoCs, is set to expire this year.

MediaTek plans to launch its own Windows on Arm chip in late 2024, though it's unclear if it has Microsoft's approval. The legal dispute stems from Qualcomm's acquisition of Nuvia, with Arm claiming Nuvia's licenses are non-transferable without permission. Arm terminated the licenses, requiring Qualcomm to stop using processor designs developed under those agreements. Arm asserts current Copilot+ SoCs descend from Nuvia's chips, potentially subjecting them to an injunction if Arm prevails in court. Qualcomm maintains its existing Arm license rights cover its custom CPUs. Both companies declined to comment on the ongoing legal matter.
The Courts

Brazil Hires OpenAI To Cut Costs of Court Battles 16

Brazil's government is partnering with OpenAI to use AI for expediting the screening and analysis of thousands of lawsuits to reduce costly court losses impacting the federal budget. Reuters reports: The AI service will flag to government the need to act on lawsuits before final decisions, mapping trends and potential action areas for the solicitor general's office (AGU). AGU told Reuters that Microsoft would provide the artificial intelligence services from ChatGPT creator OpenAI through its Azure cloud-computing platform. It did not say how much Brazil will pay for the services. AGU said the AI project would not replace the work of its members and employees. "It will help them gain efficiency and accuracy, with all activities fully supervised by humans," it said.

Court-ordered debt payments have consumed a growing share of Brazil's federal budget. The government estimated it would spend 70.7 billion reais ($13.2 billion) next year on judicial decisions where it can no longer appeal. The figure does not include small-value claims, which historically amount to around 30 billion reais annually. The combined amount of over 100 billion reais represents a sharp increase from 37.3 billion reais in 2015. It is equivalent to about 1% of gross domestic product, or 15% more than the government expects to spend on unemployment insurance and wage bonuses to low-income workers next year. AGU did not provide a reason for Brazil's rising court costs.
Crime

British Duo Arrested For SMS Phishing Via Homemade Cell Tower (theregister.com) 25

British police have arrested two individuals involved in an SMS-based phishing campaign using a unique device police described as a "homemade mobile antenna," "an illegitimate telephone mast," and a "text message blaster." This first-of-its-kind device in the UK was designed to send fraudulent texts impersonating banks and other official organizations, "all while allegedly bypassing network operators' anti-SMS-based phishing, or smishing, defenses," reports The Register. From the report: Thousands of messages were sent using this setup, City of London Police claimed on Friday, with those suspected to be behind the operation misrepresenting themselves as banks "and other official organizations" in their texts. [...] Huayong Xu, 32, of Alton Road in Croydon, was arrested on May 23 and remains the only individual identified by police in this investigation at this stage. He has been charged with possession of articles for use in fraud and will appear at Inner London Crown Court on June 26. The other individual, who wasn't identified and did not have their charges disclosed by police, was arrested on May 9 in Manchester and was bailed. [...]

Without any additional information to go on, it's difficult to make any kind of assumption about what these "text message blaster" devices might be. However, one possibility, judging from the messaging from the police, is that the plod are referring to an IMSI catcher aka a Stingray, which acts as a cellphone tower to communicate with people's handhelds. But those are intended primarily for surveillance. What's more likely is that the suspected UK device is perhaps some kind of SIM bank or collection of phones programmed to spam out shedloads of SMSes at a time.

AI

Scammers' New Way of Targeting Small Businesses: Impersonating Them (wsj.com) 17

Copycats are stepping up their attacks on small businesses. Sellers of products including merino socks and hummingbird feeders say they have lost customers to online scammers who use the legitimate business owners' videos, logos and social-media posts to assume their identities and steer customers to cheap knockoffs or simply take their money. WSJ: "We used to think you'd be targeted because you have a brand everywhere," said Alastair Gray, director of anticounterfeiting for the International Trademark Association, a nonprofit that represents brand owners. "It now seems with the ease at which these criminals can replicate websites, they can cut and paste everything." Technology has expanded the reach of even the smallest businesses, making it easy to court customers across the globe. But evolving technology has also boosted opportunities for copycats; ChatGPT and other advances in artificial intelligence make it easier to avoid language or spelling errors, often a signal of fraud.

Imitators also have fine-tuned their tactics, including by outbidding legitimate brands for top position in search results. "These counterfeiters will market themselves just like brands market themselves," said Rachel Aronson, co-founder of CounterFind, a Dallas-based brand-protection company. Policing copycats is particularly challenging for small businesses with limited financial resources and not many employees. Online giants such as Amazon.com and Meta Platforms say they use technology to identify and remove misleading ads, fake accounts or counterfeit products.

DRM

Big Copyright Win in Canada: Court Rules Fair Use Beats Digital Locks (michaelgeist.ca) 16

Michael Geist Pig Hogger (Slashdot reader #10,379) reminds us that in Canadian law, "fair use" is called "fair dealing" — and that Canadian digital media users just enjoyed a huge win. Canadian user rights champion Michael Geist writes: The Federal Court has issued a landmark decision on copyright's anti-circumvention rules which concludes that digital locks should not trump fair dealing. Rather, the two must co-exist in harmony, leading to an interpretation that users can still rely on fair dealing even in cases involving those digital locks.

The decision could have enormous implications for libraries, education, and users more broadly as it seeks to restore the copyright balance in the digital world. The decision also importantly concludes that merely requiring a password does not meet the standard needed to qualify for copyright rules involving technological protection measures.

Canada's 2012 "Copyright Modernization Act" protected anti-copying technology from circumvention, Geist writes — and Blacklock's Reports had then "argued that allowing anyone other than original subscriber to access articles constituted copyright infringement." The court found that the Blacklock's legal language associated with its licensing was confusing and that fair dealing applied here as well...

Blacklock's position on this issue was straightforward: it argued that its content was protected by a password, that passwords constituted a form of technological protection measure, and that fair dealing does not apply in the context of circumvention. In other words, it argued that the act of circumvention (in this case of a password) was itself infringing and it could not be saved by fair dealing. The Federal Court disagreed on all points...

For years, many have argued for a specific exception to clarify that circumvention was permitted for fair dealing purposes, essentially making the case that users should not lose their fair dealing rights the moment a rights holder places a digital lock on their work. The Federal Court has concluded that the fair dealing rights have remained there all along and that the Copyright Act's anti-circumvention rules must be interpreted in a manner consistent with those rights.

"The case could still be appealed, but for now the court has restored a critical aspect of the copyright balance after more than a decade of uncertainty and concern."
HP

Jury Finds Autonomy Founder Mike Lynch Not Guilty of Defrauding HP (bbc.co.uk) 28

The BBC reports that British tech tycoon Mike Lynch "has been cleared of fraud charges he faced in the U.S. over the $11bn (£8.6bn) sale of his software firm to Hewlett-Packard in 2011." A jury in San Francisco found him not guilty on all counts in a stunning victory for Mr Lynch, who had been accused of inflating the value of Autonomy, his company, ahead of its sale. Mr Lynch, who faced more than 20 years in prison if convicted, had denied the charges and took the stand to defend himself.

In his testimony, he maintained he had focused on technology not accounting, distancing himself from other executives, including the company's former chief financial officer who was already successfully prosecuted for fraud... Mr Lynch made £500m from the sale. Just a year later, HP wrote down the value of Autonomy by $8.8bn. Years of legal battles followed. The company's chief financial officer, Sushovan Hussain, was found guilty of fraud in 2018 and later sentenced to five years in prison...

Mr Lynch's team pushed the argument that HP had failed to properly vet the deal and mismanaged the takeover, while he testified he was uninvolved with the transactions being described.

Lynch's lawyers said the verdict "closes the book on a relentless 13-year effort to pin HP's well-documented ineptitude on Dr Lynch. Thankfully, the truth has finally prevailed."

Thanks to Slashdot reader Bruce66423 for sharing the news.
Youtube

For Video of Helicopter Shooting Fireworks at Lamborghini, YouTube Influencer Faces 10 Years in Prison (msn.com) 131

An anonymous reader shared this report from the Washington Post: A YouTuber who posted a Fourth of July video in which passengers on a low-flying helicopter shot fireworks at a speeding Lamborghini is facing a federal charge tied to the stunt.

Suk Min Choi, 24, who runs a YouTube channel under the name Alex Choi, was charged Thursday with causing the placement of an explosive or incendiary device on an aircraft, the Justice Department announced. He arranged to have the helicopter fly over the El Mirage Dry Lakebed near Los Angeles in June 2023 for a video titled "Destroying a Lamborghini With Fireworks," according to a complaint filed in the Central District Court of California. The video, released on July 4, shows scenes akin to an action film as Choi laughs while driving the Lamborghini and helicopter-launched fireworks ricochet off the car, enveloping it in sparks...

Choi faces up to 10 years in prison if convicted, according to the Justice Department.

More details from NBC Los Angeles: Federal authorities said radar data from the day of the video shoot showed that the helicopter left an airport in Pacoima, California, around 1:53 p.m. and turned toward El Mirage Lake, a dry lake in California, where the video was filmed. The helicopter's transponder was then turned off, according to the affidavit. The helicopter reappeared on the radar and flew back to the airport just before 9 p.m., the document says.

The pilot initially told an FAA inspector that he did not know anything about the El Mirage video, according to the affidavit. In a follow-up call, he told inspectors that he did not want Choi to know he was speaking with them and said "Choi was doing unsafe activities involving cars and aircraft." In January, the FAA issued an emergency order revoking the pilot's private pilot certification, the affidavit says.

The Courts

Yelp Can Sue Reputation Company For Promising To Suppress Bad Reviews (reuters.com) 8

Yelp can pursue a lawsuit accusing a reputation management company of fraudulently advertising its ability to remove "bad" reviews from the business review website. From a report: In a decision late Thursday night, U.S. District Judge William Alsup in San Francisco said Yelp can pursue trademark infringement and unfair competition claims against ReviewVio, which operates as Dandy. Yelp said ReviewVio's ads, which include the Yelp logo, harmed its reputation by suggesting that businesses could pay for artificially inflated star ratings.

This allegedly undercut honest businesses that will not pay to remove negative reviews, and undermined the usefulness of Yelp's website to consumers. Yelp also said it lost ad revenue from businesses that paid for "review gating," which the company prohibits, or incorrectly believed that Yelp endorsed the practice.

The Courts

Court Rules $17 Billion UK Advertising Lawsuit Against Google Can Go Ahead (reuters.com) 18

An anonymous reader quotes a report from Reuters: Google parent Alphabet must face a lawsuit worth up to $17.4 billion for allegedly abusing its dominance in the online advertising market, London's Competition Appeal Tribunal (CAT) ruled on Wednesday. The lawsuit, which seeks damages on behalf of publishers of websites and apps based in the United Kingdom, is the latest case to focus on the search giant's business practices. Ad Tech Collective Action is bringing the claim on behalf of publishers who say they have suffered losses due to Google's allegedly anti-competitive behavior.

Google last month urged the CAT to block the case, which it argued was incoherent. The company "strongly rejects the underlying allegations", its lawyers said in court documents. The CAT said in a written ruling that it would certify the case to proceed towards a trial, which is unlikely to take place before the end of 2025. The tribunal also emphasized the test for certifying a case under the UK's collective proceedings regime -- which is roughly equivalent to the United States' class action regime -- is relatively low.
"Google works constructively with publishers across the UK and Europe," Google legal director Oliver Bethell said in a statement. Bethell added: "This lawsuit is speculative and opportunistic. We'll oppose it vigorously and on the facts."
AI

NewsBreak, Most Downloaded US News App, Caught Sharing 'Entirely False' AI-Generated Stories 98

An anonymous reader quotes a report from Reuters: Last Christmas Eve, NewsBreak, a free app with roots in China that is the most downloaded news app in the United States, published an alarming piece about a small town shooting. It was headlined "Christmas Day Tragedy Strikes Bridgeton, New Jersey Amid Rising Gun Violence in Small Towns." The problem was, no such shooting took place. The Bridgeton, New Jersey police department posted a statement on Facebook on December 27 dismissing the article -- produced using AI technology -- as "entirely false." "Nothing even similar to this story occurred on or around Christmas, or even in recent memory for the area they described," the post said. "It seems this 'news' outlet's AI writes fiction they have no problem publishing to readers." NewsBreak, which is headquartered in Mountain View, California and has offices in Beijing and Shanghai, told Reuters it removed the article on December 28, four days after publication.

The company said "the inaccurate information originated from the content source," and provided a link to the website, adding: "When NewsBreak identifies any inaccurate content or any violation of our community standards, we take prompt action to remove that content." As local news outlets across America have shuttered in recent years, NewsBreak has filled the void. Billing itself as "the go-to source for all things local," Newsbreak says it has over 50 million monthly users. It publishes licensed content from major media outlets, including Reuters, Fox, AP and CNN as well as some information obtained by scraping the internet for local news or press releases which it rewrites with the help of AI. It is only available in the U.S. But in at least 40 instances since 2021, the app's use of AI tools affected the communities it strives to serve, with Newsbreak publishing erroneous stories; creating 10 stories from local news sites under fictitious bylines; and lifting content from its competitors, according to a Reuters review of previously unreported court documents related to copyright infringement, cease-and-desist emails and a 2022 company memo registering concerns about "AI-generated stories."
Five of the seven former NewsBreak employees Reuters spoke to said most of the engineering work behind the app's algorithm is carried out in its China-based offices. "The company launched in the U.S. in 2015 as a subsidiary of Yidian, a Chinese news aggregation app," notes Reuters. "Both companies were founded by Jeff Zheng, the CEO of Newsbreak, and the companies share a U.S. patent registered in 2015 for an 'Interest Engine' algorithm, which recommends news content based on a user's interests and location."

"NewsBreak is a privately held start-up, whose primary backers are private equity firms San Francisco-based Francisco Partners, and Beijing-based IDG Capital."
Facebook

Meta Withheld Information on Instagram, WhatsApp Deals, FTC Says (yahoo.com) 9

Meta Platforms withheld information from federal regulators during their original reviews of the Instagram and WhatsApp acquisitions, the US Federal Trade Commission said in a court filing as part of a lawsuit seeking to break up the social networking giant. From a report: In its filing Tuesday, however, the FTC said the case involves "information Meta had in its files and did not provide" during the original reviews. "At Meta's request the FTC undertook only a limited review" of the deals, the agency said. "The FTC now has available vastly more evidence, including pre-acquisition documents Meta did not provide in 2012 and 2014."

Meta said that it met all of its legal obligations during the Instagram and WhatsApp merger reviews. The FTC has failed to provide evidence to support its claims, a spokesperson said. "The evidence instead shows that Meta faces fierce competition and that Meta's significant investment of time and resources in Instagram and WhatsApp has benefited consumers by making the apps into the services millions of users enjoy today for free," spokesperson Chris Sgro said in a statement. "The FTC has done nothing to build its case over the past four years, while Meta has invested billions to build quality products."

The Courts

Jury Finds Boeing Stole Technology From Electric Airplane Startup Zunum 46

A federal court jury in Seattle has ruled against Boeing in a lawsuit brought by failed electric airplane startup Zunum and awarded $81 million in damages -- which the judge has the option to triple. From a report: Zunum alleged that Boeing, while ostensibly investing seed money to get the startup off the ground, stole Zunum's technology and actively undermined its attempts to build a business. It accused Boeing of "a targeted and coordinated campaign" to gain access to its "business plan, market and technological analysis, and other trade secrets and proprietary information," then using that to develop its own hybrid-electric plane design.

Zunum also accused Boeing of sabotaging its efforts to attract funding from aerospace suppliers Safran and United Technologies. The jury found that Boeing had misappropriated Zunum's trade secrets and breached its contract with the startup. It also found that Boeing's actions were "willful and malicious," which opens the door for the judge to award triple damages plus legal costs in a case that has already been running for more than four years.
The Internet

FCC Sued by Broadband Industry Groups Over Net Neutrality Rules (arstechnica.com) 34

Several broadband industry lobby groups have filed lawsuits against the Federal Communications Commission (FCC) in an attempt to overturn the recently approved net neutrality rules. The regulations, which prohibit blocking, throttling, and paid prioritization, are scheduled to take effect on July 22. The lawsuits were filed in various US appeals courts by groups representing cable, telecom, and mobile Internet service providers, including NCTA-The Internet & Television Association, USTelecom, CTIA-The Wireless Association, and several state-level associations. The groups argue that the FCC lacks the authority to reclassify broadband as a telecommunications service under Title II of the Communications Act of 1934 without explicit instructions from Congress.

In addition to the lawsuits, the industry groups have also petitioned the FCC for a stay of the rules, claiming that their members will suffer irreparable harm if the regulations take effect while litigation is pending. The FCC is expected to reject the petition, but the groups can then seek an injunction from appeals court judges to prevent enforcement. The industry's legal challenge is based on the Supreme Court's evolving approach to the "major questions" doctrine, which limits federal agencies' ability to make decisions on significant issues without clear congressional authorization. However, FCC Commissioner Geoffrey Starks maintains that the agency's authority to regulate broadband as a telecommunications service is "clear as day."
Piracy

Napster Sparked a File-Sharing Revolution 25 Years Ago (torrentfreak.com) 49

TorrentFreak's Ernesto Van der Sar recalls the rise and fall of Napster, the file-sharing empire that kickstarted a global piracy frenzy 25 years ago. Here's an excerpt from his report: At the end of the nineties, technology and the Internet were a playground for young engineers and 'hackers'. Some of them regularly gathered in the w00w00 IRC chatroom on the EFnet network. This tech-think-tank had many notable members, including WhatsApp founder Jan Koum and Shawn Fanning, who logged on with the nickname Napster. In 1998, 17-year-old Fanning shared an idea with the group. 'Napster' wanted to create a network of computers that could share files with each other. More specifically, a central music database that everyone in the world could access.

This idea never left the mind of the young developer. Fanning stopped going to school and flanked by his friend Sean Parker, devoted the following months to making his vision a reality. That moment came on June 1, 1999, when the first public release of Napster was released online. Soon after, the software went viral. Napster was quickly embraced by millions of users, who saw the software as something magical. It was a gateway for musical exploration, one that dwarfed even the largest record stores in town. And all for free. It sounds mundane today, but some equated it to pure technological sorcery. For many top players in the music industry, Napster's sorcery was pure witchcraft. At the time, manufacturing CDs with high profit margins felt like printing money and Napster's appearance threatened to ruin the party. [...]

At the start of 2001, Napster's user base reached a peak of more than 26.4 million worldwide. Yet, despite huge growth and backing from investors, the small file-sharing empire couldn't overcome the legal challenges. The RIAA lawsuit resulted in an injunction from the Ninth Circuit Court, which ordered the network to shut down. This happened during July 2001, little more than two years after Napster launched. By September that year, the case had been settled for millions of dollars. While the Napster craze was over, file-sharing had mesmerized the masses and the genie was out of the bottle. Grokster, KaZaa, Morpheus, LimeWire, and many others popped up and provided sharing alternatives, for as long as they lasted. Meanwhile, BitTorrent was also knocking on the door.
"Napster paved the way for Apple's iTunes store, to serve the demand that was clearly there," notes Ernesto. "This music streaming landscape was largely pioneered by a Napster 'fan' from Sweden, Daniel Ek."

"Like many others, Ek was fascinated by the 'all you can play' experience offered by file-sharing software, and that planted the seeds for the music streaming startup Spotify, where he still serves as CEO today. In fact, Spotify itself used file-sharing technology under the hood to ensure swift playback."

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