One of the last large file-sharing services falls

In documents filed with the District Court for the Southern District of New York on Monday, eDonkey founders and parent company MetaMachine Inc. said they’ll pay $30 million to record companies to settle the case. They also agreed to refrain from conducting any further business that might involve copying, distributing or otherwise infringing copyrighted works.

The settlement follows just more than a month after Sharman Networks Ltd., developer of the file-sharing software Kazaa, said it would pay the entertainment industry $100 million to settle similar lawsuits. Other file-sharing companies to succumb include Grokster Ltd., which shut down last year after losing a case in front of the U.S. Supreme Court.

The eDonkey Web site now features a statement, similar to one on the Grokster site, informing visitors that illegal downloaders can be prosecuted and ominously warning visitors that they aren’t anonymous by displaying and claiming to log their IP address.
The eDonkey settlement will be paid to Arista Records LLC, Atlantic Recording Corp., Capitol Records Inc., Elektra Entertainment Group Inc., Sony BMG Music Entertainment and UMG Recordings Inc.

Lime Wire LLC is one of few the remaining popular file-sharing software companies although in August a group of record companies filed a suit against it in the U.S. asking for damages that could amount to as much as $476 million.

Late last year, eDonkey’s founder predicted the demise of the file-sharing industry. During a speech in front of the Senate Judiciary Committee, he warned that U.S. peer-to-peer companies would all cease to exist because they would lack the resources to defend themselves against the record companies under the ruling he characterized as vague in the Grokster suit..

The record companies and movie studios have spent the last couple years carrying out attacks against the creators of file-sharing software, contending they should be held liable for copyright infringement by their users. The file-sharing software developers have largely failed in their arguments that they warn users not to illegally transfer materials and so shouldn't be held responsible for how people use their products.

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