In June of last year the American Supreme Court ruled that makers of peer-to-peer file-swapping technology can be held responsible for the copyright infringement that their products allow (remember when napster was free for music downloads). The case, originally brought by MGM, a big Hollywood film studio, was joined by 27 of the world's leading film and music companies. The ruling meant that the file-sharing firms could be sued by entertainment companies for the theft of copyright-protected material using their software.

The rationale the Music companies used was their loss of record sales to free peer to peer file exchanges. The reason such services existed was the high cost of music CDs (very little of the profit went to the artists) and the profit the record companies made off the consumer. Around the world it was estimated that some 2.6 billion songs were swapped. They had shut down Napster and pursued some 8000 individuals in 2005 who were swapping free songs.

"Furthermore, legal downloading could cannibalize industry profits as fans are given the ability to pick and choose favourite tracks rather than having to buy whole albums. Indeed, advocates of P2P file-sharing insist that the option to sample for nothing an artist's oeuvre could work in the record company's favour as music buyers discover new favourites whose material they will subsequently pay for. Ultimately, many critics of the music business claim that its problems stem from an inability to produce a product that consumers want to buy, and that most illegal down loaders will flatly refuse to pay for unappetisingly packaged songs and films that they previously got for free." Economist June 2005

Fast forward to 2006 : "Record companies around the world are reaping ever greater sums from the digital downloading of songs. But as online music moves into the mainstream, the industry faces suspicions that it is fixing prices for tunes. That will hardly endear it to consumers as it continues to wage war against piracy" Economist Mar 3 2006

Need I say more? Perhaps next week.