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LimeWire gets schooled in law by RIAA members

Antitrust? Fuhgeddaboudit!

Internet Security Threat Report 2014

A federal judge dismissed all claims yesterday by the P2P file-sharing network LimeWire that the record industry illegally blocked its attempts to build a legitimate digital music service.

LimeWire's suit was a counter-claim to a copyright complaint bought by the labels last year.

The 13 labels named in the complaint, including the four majors, were accused of price-fixing, hacking LimeWire users, falsely claiming that Lime Wire promotes child pornography, and pressuring artists not to deal with P2P networks.

Gerard Lynch, sitting in District Court in New York, agreed with the record industry that Limewire had no case. The allegations made over child pornography are not a matter for the federal antitrust court, he wrote.

On price fixing, Lynch ruled that though cartel-like behaviour "may have harmed competition generally", Limewire failed to show it specifically had suffered, as its allegations under the Sherman Act required. The Sherman Act is the cornerstone of US antitrust laws.

LimeWire also alleged that record labels conspired to hamper its technology, using hash-based filtering, for distributing licensing music over P2P. They refused LimeWire access to their database of unique song identifiers or "hashes". LimeWire wanted to use the data to identify legal content on its network.

The labels refused to provide LimeWire with hashes on grounds that LimeWire had not obtained a licence from Altnet, a company that holds disputed patents on hash-based filtering. This, the P2P firm alleged, was a "boycott and collusive activity" intended to hurt its attempts to enter the download retail market through a website front-end called MagnetMix.

LimeWire further claimed that the RIAA tried to coerce file-sharing networks to sell up to iMesh. Unlike LimeWire, all iMesh traffic runs through central servers. Its filtering technology is based on acoustic signatures rather than hashes, and in 2005 it became the only P2P music retailer approved by the RIAA.

Lynch found that Limewire had been specifically harmed this time. He wrote: "[The] mandatory [hash] licensing regime inflicted direct and concrete antitrust injury on Lime Wire by raising its costs and thus impeding its ability, and the ability of other P2P retailers utilizing hash-based filtering technology, to operate as effective competitors in the digital distribution market.

"Accordingly, LimeWire has established antitrust standing to challenge counter-defendants' mandatory licensing scheme."

This meant the judge would consider the allegations under sections one and two of the Sherman Act. Unfortunately for LimeWire, legal preparations seem to have let it down.

Later passages of the judgment show it failed to set out facts to support claims of collusion. For example, its lawyers failed to describe the relationship between the 13 independent defendants and the RIAA as a group. So LimeWire's assertions that the RIAA rejected its hash-based system out of hand "fail to plausibly suggest the existence of a conspiracy," Lynch wrote.

"In sum, LimeWire has failed to plead facts plausibly suggesting a 'meeting of the minds' among any of the [labels] to refuse 'reasonable access' to their hashes."

The second suggestion over music filtering - that the RIAA tried to create a "shared monopoly" [three US tobacco companies were convicted of running a shared monopoly] in iMesh - was dismissed for lack of evidence.

So Lynch eventually dismissed all of LimeWire's claims in, and ruled that it cannot appeal the antitrust rulings in Federal Court. It could choose to pursue the "child porn" mudslinging at state level, if it thinks this is worth the legal fees.

In short, LimeWire got a kicking. The phones at parent company Lime Group weren't being answered when we called this evening. ®

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