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CD replicator busted in $1.2m MP3 piracy case

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A Swedish CD-ROM replicating company is to pay $1.2 million after being caught with pirated MP3 files and software.

More than 20,000 CD-ROMs were found at Stockholm-based DCM Group, a division of Digital Communication Media (DCM), after a "knock and talk" version of a dawn raid.

The Business Software Alliance (BGSA) and the International Federation of the Phonographic industry (IFPI) slapped the Swedes' wrists after they uncovered a haul of compilation CDs containing copied games, music files, and software from manufacturers such as Macromedia and Symantec.

According to DMC, the company was an innocent party in the proceedings, and has agreed to up its anti-piracy measures as part of its $1.2m settlement, which will be meted out over the next three years.

IFPI refused to reveal the names of the artists used for the MP3 files, but said they were all well-known international Latin pop artists.

"DCM did not check the content of these orders and the pirates, operating through a broker, took advantage of this," said Geoff Taylor, deputy general counsel at IFPI.

"This case demonstrates once again the urgent need for replication and mastering plants to put in place strict procedures to ensure that they respect copyright laws."

Hans von Schreeb, DCM chairman, said the fraudsters had outwitted his company - which has been forced to postpone its IPO due to the fiasco. "This was a completely new and very advanced type of piracy which demonstrates why vigilance and correct procedures are required.

"The pirates were very cunning and had an excellent technical knowledge of this business," he said. "We have paid a very high price for out involuntary participation." ®

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