Kazaa Outed Over 'Trust Fund' for Red Cross

danwarne writes "In one of the most bizarre twists in the court action against Kazaa yet, documents have been tendered in Australian Federal Court court that showed that Kazaa claimed to have set up a trust fund for donations to the Red Cross (at about the time the tsunami hit), but the Red Cross has confirmed in writing it has never heard from them about it. The music industry alleged in court that it was a tactic by Kazaa parent company Sharman Networks to park money out of the reach of the music industry if it loses the case and is left with a huge damages bill. This in the same week that it came out in court that top Sharman/BDE execs offloaded their multi-million dollar homes. Sounds like Kazaa's lawyers might be telling them to prepare for the worst..."

Comments

ObLinus

[SinaSa]

"The music industry alleged in court that it was a tactic by Kazaa parent company Sharman Networks to park money out of the reach of the music industry if it loses the case and is left with a huge damages bill."

Real men don't scam citizens for stash-money! They zip it up, call it goat porn and upload it to Kazaa! Oh wait...

Hurray!

[sgant]

The RIAA is about to shut down another service that no one uses anymore! Way to go!

Glad to see them wasting their money by pissing it away like this. The people that download music/movies will always be about 10 steps ahead of them.

Re:Hurray!

[Olix]

(Olix uses knowledge gained in GCSE buisness lessons) does Kazza actually have money then? Where do they earn it from? I would have thought, if the company is private limited, then they would just declare the comapny bankrupt and start again...

Re:Hurray!

[Sinus0idal]

Yep, but once they are finished with Kazaa, who is next? Hopefully not the edonkey network...

Re:Hurray!

[m50d]

They earn it from all the bundled spyware. So they do have quite a bit, and the RIAA will get as much of it as they can. But the execs are probably safe, yes.

Re:Hurray!

[MosesJones]

The people that download music/movies will always be about 10 steps ahead of them.

Quick summary of what you said

"Run run as fast as you can, you can't catch me I'm the gingerbread man"

I'm assuming in this downloading that you are making direct contributions to the artists that made the films/music rather than just ripping it off ? Didn't think so.

In my book that makes you an equal git with the RIAA. They might be over-zealous, but you are a plain and simple thief.

Re:Hurray!

[Peaceful_Patriot]

Just because the music industry has changed the copyright rules to their advantage, doesn't mean downloaders are thieves. Unless I am copying the material and selling it for a profit, or claiming I am the artist, they have no leg to stand on!

People have been sharing music for as long as I remember. In the 60's My sister used a reel to reel to tape songs off the radio and make copies for her friends. I had a casetter recorder/player with two tape drives in the 70s which was specifically for copying tapes. The 80's brought us VCRs which were ruled as legal despite the attempt of the movie insustry to outlaw them. The 90s brought us file sharing and the RIAA.

You might buy the line that unless you pay for the music you are a pirate, but I remember the history, and I'm not doing anything that hasn't been done for the last 40 years and I don't feel guilty about it.

Journalism

[kureido]

The Red Cross wouldn't lie. Certainly my-main-man at the Cross, Jean-Jacques, was nothing but totally upfront during our interview. And I've interviewed plenty of spivs. My spivometre didn't move a nanometre while I was talking to him. Jean-Jacques was a straight up bro.

What in the holy name of hell is passing for journalism these days? I might as well be reading my little brother's blog.

Re:Journalism

[h4rm0ny]

Seconded! Who approved this piece of crap! I quote from the beginning of the article:

them on attracting the world's most downloaded program in history as a contributor to its coffers. With three billion files downloaded each month on Kazaa, the Red Cross could almost rebuild Asia single-handedly from what must be a generous pool of dollars from Sharman

Most downloaded program in the world? Rebuild Asia singe-handedly? This isn't hyperbole, this pure Improbability-Drive-A-Bole! The editor only needed to read three short paragraphs in to reach this rubbish! So either no-one read the article, or else they didn't understand what they were reading.
My two pence!

Re:Journalism

[shark72]

"Most downloaded program in the world? Rebuild Asia singe-handedly? This isn't hyperbole, this pure Improbability-Drive-A-Bole! The editor only needed to read three short paragraphs in to reach this rubbish! So either no-one read the article, or else they didn't understand what they were reading."

Many journalists and correspondents write in a colloquial style; it's part of their appeal. Google on "Hunter S. Thompson" or "Ann Coulter" or "Dominick Dunne" to see some more examples.

To your credit (and to the credit of others who are boggled by the correspondent's writing style), I understand that many Slashdotters are of the New Media generation, and simply did not grow up in the day when print medium was king and many correspondents had a trademark style.

Perhaps an appreciation of Dispatch's style is better suited toward non-Slashdot types. Many Slashdotters are coders; a 0 is a 0 and a 1 is a 1 and there's just no room for flexibility. The rest of us know that Dispatch isn't being literal when he says that the Red Cross could have "rebuilt Asia" with Sharman's riches, and we don't mind at all. But I can certainly understand that those who live in the land of ones and zeros would be upset by his rhetorical style.

Re:Journalism

[Qzukk]

Style or not, the article drips with flagrant wrongness. Implying that because billions of files are traded on kazaa every day means kazaa has money... why? Does the author of the article think that Kazaa takes a few cents off the top of every copyright infringing file sent for free?

Re:Journalism

[bayvult]

Anyone who takes a PR's comments at face value and calls him a "straight up bro" should have rocks thrown at him, yes.

But this couldn't be a blog, because it contains news I hadn't read someplace else. It would be disqualified from the blog-o-sphere.

p2p not synonymous w/ kazaa

[dirvish]

Those wankers at Kazaa have hurt the p2p cause quite a bit. They knew they were doing shady stuff (adware, etc.) and now they are rightfully paying the price. For every step that people like the EFF make to make government realize it shouldn't over-regulate technology, shysters like Kazaa force things a step back to make a quick buck.

Upsides?

[ElVaquero]

Maybe if the RIAA wins they'll think they've actually stopped something and forget about Soulseek.

Re:Upsides?

[BackInIraq]

First rule of Soulseek:

Never, ever talk about Soulseek.

Priorities

[prdallan]

Don't know about the law in Autralia or even in the US, but in certain countries actions similar to some of the described above could have as consequence people doing some time in jail...

At least here where I am, before performing this kind of actions better one should really better consult with criminal lawyers and be very carefull with it; One should be more worried with the penal consequences than with financial assets....

Not suprised...

[ImaLamer]

Considering this company makes money off of bootlegging and piracy it makes sense.

But before you fly off the handle, look at it this way: They took software for trading files and turned it and it's abilities into a profit machine, stooping so far as to load users with spyware to further that profit (remember: Kazaa Lite has no connection to Sharman). All the time we all knew that Kazaa was used 99% of the time for retrieving copyrighted works people had no rights to. This isn't Bittorrent where many files are free.

After they had cashflow they had one of two responsiblities: Either filter owned works or pay up for those works. They made information trade their business and they didn't own the information they were "brokering".

I don't know how people can be suprised or offended when Kazaa or Napster gets sued. I don't work for the **AA, and am not Dr. Dre, just not suprised at this. I'm not suprised if they get there asses handed to them. (I'm not counting on them getting off on any technicalities, I'm just saying they have it coming.)

Napster and Kazaa with websites is tantamount to a drug dealer on the corner with a sign and them turning a profit is as disgusting as it gets. I've bootleged and pirated quite a few things but I nor anyone else should be making money off of that.

That is the point isn't it?

Re:Not suprised...

[Doc Ruby]

Actually, it's more like in the 1980s, when a very high percentage of pager users were drug dealers; a very high percentage of pages were illegal drug transactions. Were the telcos liable for filtering those pages?

Re:Not suprised...

[shark72]

Kazaa went into business because they correctly saw the huge opportunity in the high demand for pirated material. Their very business model is based on this. Anybody who claims that Kazaa thought that it would be used primarily for trading Linux distros is either naive, or deliberately being Kazaa's stooge.

They took the risk, and now they're in hot water. Naturally, they're using feeble excuses to avoid liability. There's nothing to be gained by our ignoring the obvious and pretending that Kazaa isn't complicit.

Re:Not suprised...

[mark-t]

The reason why there were no penalties for it before is that until fairly recently, the potential for noncommercial copyright infringement to actually make an impact in the total number of copies out there was virtually nonexistant, and simply not worth the time to pursue. Outside of a few fringe warez BBS's, the most common form of piracy was via sneakernet, where people would physically exchange disks. Ever-improving internetworking technology in the hands of the consumer, however, has made very large scale copy distribution increasingly available to them at virtually no cost at all, presenting an ever-growing threat to what Copyright actually is supposed to be. Copyright holders, and the agents that represent them, are compelled to act (ie, press charges) against infringers in response to the technological changes in order to preserve the value of Copyright.

Unfortunately, a return to the state Copyright was in before 1996 would also necessitate a return to a time where the Internet wasn't what it is now either. Since the latter isn't possible, neither is the former.

Sorry.

Re:Not suprised...

[Anonymous Coward]

They took software for trading files and turned it and it's abilities into a profit machine

There's nothing inherently wrong with that.

After they had cashflow they had one of two responsiblities: Either filter owned works or pay up for those works.

They have no such responsibility, any more than Microsoft has a responsibility to build filters into IIS to stop people from putting copyrighted works on websites without permission.

I don't know how people can be suprised or offended when Kazaa or Napster gets sued.

Because this software is just another way of copying files. You don't see the Apache Foundation get sued, or Microsoft for Windows file sharing, or AT&T for writing 'cp'.

Privatized Court of Public Opinion

[Doc Ruby]

We know that none of these sleazy biz tactics have anything to do with their liability for abuse of their software by some users. I bet these stories are being promoted by the music biz to cover up a Supreme Court decision against Kazaa/Grokster/Morpheus this month, which won't have a legal basis, but is rather just a favor to corporate media which hates P2P. The rest of the corporate media, in the "news" business, will be able to report that the Supremes dealt the "sleazy" P2P corps the justice they deserve, because they run tsunami scams. It will all make sense in the "news", though it won't have any legal merit.

Re:Privatized Court of Public Opinion

[Doc Ruby]

It doesn't matter how sleazy they are, when deciding their liability for the actions of users, as being argued in the Supreme Court this month. Even the basest criminals have the rights to exercise their legitimate actions free from liability. It doesn't matter how righteous they are, what their business model is, whether they eat babies in their office - when judging their right to distribute software that is sometimes abused by some of its users. Unless you're so distracted by their other reported abuses, that you've totally ignored that I'm talking about their Supreme Court case deciding only that software liability, you're demonstrating exactly what I'm talking about.

"Fraudulent conveyance"

[Beryllium Sphere(tm)]

Normally it's legal to sell your house to your brother for ten dollars. However if you do it to get your property out of the reach of your creditors then Bad Things will happen to you.

At least that's the way it works in US law.

The music industry is making grave accusations here.

Re:"Fraudulent conveyance"

[shark72]

"Okay, this is getting off-topic (and I kind of expect to be modded down as such), but how exactly are they supposed to know exactly _why_ you did it? How could they even begin to prove it, even if it _were_ true?"

There is a term you may have heard on TV shows or movies: "circumstantial evidence." It's a fact that can be inferred from other facts. It's generally admissible in courts.

For example, if an executive of a company whose business model was based on piracy, and whose said company was headquartered in Vanaatu, and whose headquarters were raided, suddenly sold his multi-million dollar mansion to his brother for $10, the courts would not need to see a signed note stating "I am selling you my house for $10 so the courts don't get it if I lose this case" in order to figure out what's going on. Courts are usually pretty good about identifying ducks if they walk, act and quack like such, and less tolerant of "bad actors" than many people might think.

I call bullshit on this story

[ArsenneLupin]

Timing is wrong. How do you compare this:

The timing of the news coincided with the devastating tsunami and the global charity needed all it could get at its greatest time of need.

... and ...:

At the time, Dispatch thought that Red Cross spokesman Jean-Jacques Bovay might have needed more time, just to check and be on the safe side before finally declaring Who the hell is this Sharman of which you speak. It was Christmas Eve that we phoned him, afterall.

So, if I got this right, Dispatch phoned the Red Cross two days before the catastrophe occurred for which the alleged trust fund was set up? What the hell. I smell a rat here.

Re:I call bullshit on this story

[shark72]

The timing is sadly coincidental, but not wrong. Kazaa was pulling their hijinks with the Red Cross before Christmas; you can read the dispatch from Christmas eve which covered it at the time.

Yeah, the tsunami happened a few days later. Yes, it was sad, and yes, the Red Cross stepped in to help. But that was a coincidence -- Kazaa could not have known that this would happen. The portion you quoted uses the word "coincided" which is another form of "coincidence." And, sometimes coincidences happen.

Not so

[Nik13]

You make it sound like they're only attacking networks/means that nobody uses anymore, but they've done quite a lot of damage to BitTorrent and eDonkey/eMule "communities" too. I wouldn't exactly say that nobody uses those anymore. Granted, they haven't shut down those 2 yet, but it's not like they aren't trying or not doing anything about them either. (Mind you I'm quite happy to see this crapzaa plague go away)

Re:Not so

[sgant]

They won't shut down BitTorrent. They can't shut something down unless it's a central entity.

I mean, they could try to go after the original programmer of Bittorrent or something, though the source out in the world protected by the MIT licence...so the RIAA would also have to challenge that if they want to "shut it down".

They close a tracker site down, 10 more pop up. Bittorrent isn't going anywhere and in fact will become better and better.

The RIAA are fighting a losing battle...do they have a right to fight it, sure. But I still belive they should instead try to find a better solution then what they're attempting, because as you can see, it doesn't really stop anyone from trading music. They shut down Napster, people still trade, they shut down Kaaza people still trade. In fact, I'm willing to bet that more people trade music today then they EVER did when Napster was around. I have no facts to back that up, it's just a hunch.

Of course, I could be totally wrong.

Re:Not so

[m50d]

They weren't open source is why they went under. Gnutella is still out there and going strong while other networks from the same era are collapsing, because the source is available. Napster and Kazaa both got in trouble when they started filtering things, because that showed they could have filtered out copyright infringing stuff. That can't happen with bittorrent, because the software is open source and there is no central server.

Re:Not so

[bayvult]

They can't shut something down unless it's a central entity. ... Of course, I could be totally wrong

You are totally wrong. BitTorrent was never designed to be anonymous. BitTorrent sites were closed down quicker than the P2P networks because the individuals sharing thier files identified their IP addresses and Torrents were advertized on easy to find websites. Very easy to go after a web site.

It's weird how people see the word "decentralized" and think it's some kind of magic.

No reprecussions for VOIP

[rastakid]

will Kazaa's bad reputation affect VOIP in general?

No, because VOIP is more than Skype. Even if VOIP would equal Skype, I still don't think Kazaa could hurt Skype's reputation. Most people see Kazaa and Skype as different things, and in fact, they are different things. And they don't see Kazaa as a Bad Thing(TM).

Do you think that John Doe cares that Kazaa comes with spyware? Of course not, he hardly knows what spyware is. All he knows that he wants to download some pr0n and that his daughter wants to download the new CD of Britney Spears.

Also, John Doe wants to make cheap calls. As cheap as possible. Thus, Skype. He takes the spyware for granted. Only people like you and me (and all the other Slashdot readers) do care about it, but we are not really your average computer user, unfortunately.

It couldn't have happened...

[Alioth]

It couldn't have happened to a nicer bunch of charlatans^W people. Why people are so supportive of Kazaa, an ad/spyware peddler, I don't know. It's also obvious their business is built on copyright infringement.

Shady folks

[SteelV]

I was on the phone with a Kazaa-exec a few years back (actually, listening in), and couldn't help commenting on the rampant spyware issues. He was not actually at Kazaa, rather at a company that managed their ad-services if I remember correctly, and took a great deal of offense at my comments! He got really upset when I mentioned how Kazaa-Lite was so much better (hehehe).

He sounded fairly unscrupulous at the time, so I guess he knew what was going on fairly well and was OK with it. This seems like a continuation of past policy. Obviously the higher-ups don't care about users, just about making as much money as they can, any way they can.

I thought it would completely die years ago (I stopped using it a long time back). Maybe it will soon with all these recent "issues."

biggest snake in the grass

[Anonymous Coward]

I know Kevin Bermeister personally, and he is the worst snake in the grass you could ever meet. He'd sell his mother for a dollar.

GO on, ask around. Anyone who has been in contact with him rarely comes out untouched by his filth.

Yep, I'm staying anonimous. He knows people, you know.

Kazaa needs to go down just so he does, good enough reason for me.

New take on the Nigerian scam letter...

[michaeldot]

Dear Sir,

I am an extremely wealthy Australian businessman who needs to quickly move money out of the country.

If you let me use your bank account, I will pay you 10%.

Of course, I do already know your bank account details, given the amount of spyware I loaded onto your computer...

Sincerely,

N. Hemming
Sharman Networks

Re:That is only the beginning ...

[Jugalator]

Pl33z3, sH00t m3 n0w!

Hmm, this journalist definitely seems like a product of Microsoft's new l337 sp33k... oh, excuse me... "leetspeek" guide.

Easy Solution

[kd5ujz]

If they claim it was a trust fund for the Red Cross, then there is an easy solution, give ALL of the money to the Red Cross.