Big Brother Is Watching--and Suing

Big Brother is not only watching, he's got his lawyers ready to pounce.

Beginning today, the Recording Industry Association of America, the music biz's Washington, D.C., based lobbying arm, is on the hunt for online song-swappers, with hefty lawsuits threatened for big-time offenders. The news comes just as the movie industry secured a guilty plea in the high-profile Internet leaking of a rough version of The Hulk.

First, the RIAA's move. The group announced on Wednesday that it was changing its tactics in the war on music pirates and going after individual users instead of file-sharing sites like KaZaA, Morpheus and the granddaddy of 'em all, the now shuttered Napster. The RIAA's cyberdetectives are, as you read this, surfing the Net collecting evidence that will result in a torrent of lawsuits in the coming weeks.

"The law is clear and the message to those who are distributing substantial quantities of music online should be equally clear--this activity is illegal, you are not anonymous when you do it, and engaging in it can have real consequences," says RIAA President Cary Sherman in a statement. "We'd much rather spend time making music then dealing with legal issues in courtrooms. But we cannot stand by while piracy takes a devastating toll on artists, musicians, songwriters, retailers and everyone in the music industry."

The all-out assault comes after a pivotal federal appeals court ruling declared that StreamCast Networks, which owns peer-to-peer companies Morpheus and Grokster, cannot be legally responsible for copyright infringement just because their users are unlawfully sharing music files.

By making examples of solo song-traders, the powers that be hope to scare the average computer user to abstain from illegal swapping and instead actually pay for songs online or in stores.

"Once we begin our evidence-gathering process, any individual computer user who continues to offer music illegally to millions of others will run the very real risk of facing legal action in the form of civil lawsuits that will cost violators thousands of dollars and potentially subject them to criminal prosecution," Sherman adds.

Case in point: In April, the RIAA successfully sued four college students who put up thousands of songs on school networks. The violators all settled to the tune of $12,000 to $17,000, and some of them have already managed to pay off their debt by putting up Websites asking for donations. But they were lucky. The students could have been fined a maximum $150,000 per song under existing federal laws, and given they swapped thousands of songs, they could have been liable for millions of dollars in lost revenue.

The RIAA says its actions are necessary not only to protect record companies, but also the recording artists and songwriters who depend on those revenues for their livelihood.

In fact, the group has rallied many top artists to the cause, including Missy Elliott, Mary J. Blige, popsters Peter Gabriel, Mandy Moore and Shakira.

"It may seem innocent enough, but every time you illegally download music a songwriter doesn't get paid, and every time you swap that music with your friends a new artist doesn't get a chance," say the Dixie Chicks in one PSA. "People, including musicians, expect to be rewarded for a job well done. It's all about supply and demand. It there is not demand, there will eventually be no supply," adds Sheryl Crow.

Critics, however, charge that the RIAA's heavy-handed approach won't solve the file-sharing dilemna and could easily backfire, alienating the very music buyers it needs.

"It is unfortunate that the RIAA has chosen to declare war on its customers by engaging in protracted and expensive litigation," reads a statement from KaZaA mastermind Sharman Networks, which also said it was willing to work with music labels in developing technology to stem the piracy tide.

Indeed, music swappers haven't taken too kindly to Industry attempts to shut them down. Some have even counterattacked, defiling Websites and mocking the record companies' tactics.

Meanwhile, the RIAA's brothers in arms in the Motion Picture Association of America are also considering similar moves.

Universal Studios, however, took matters into its own hands when it came to a bootlegged rough cut of The Hulk making the peer-to-peer rounds weeks before the film's release--and stirring some nasty buzz among Internet Websites because of its poor quality. (The early criticism didn't have too negative an impact; despite the bad word of mouth, The Hulk grossed a jolly $62 million in green over the weekend, a record for a June opener.)

The studio sicced its own computer whizzes on the case and they tracked the leak back to a New Jersey man who got a copy of a very rough workprint of the comic book caper from a friend via a friend at the Manhattan ad agency working on The Hulk campaign.

The culprit, 25-year-old Kerry Gonzalez, made a copy of the work print--which had unfinished F/X and no soundtrack. He attempted to erase a digital security tag attached to the film (he failed, which is what ultimately led to his arrest) and then uploaded his bootlegged version to a Netherlands-based chatroom, where it quickly spread around the Web.

Once the studio fingered Gonzalez, it tipped off the FBI. On Wednesday, he was in the federal courthouse in Manhattan, where he pleaded guilty to one count of copyright infringement and now faces up to three years in prison and a $250,000 fine.