SAN FRANCISCO (MarketWatch) -- As any fan of "The Sopranos" knows, the mob often takes out its enemies in a gruesome fashion as a way to warn others to fall in line.
The same can be said of the campaign over the past four years instigated by the dreaded Recording Industry Association of America, more commonly known as the RIAA, which has been on a mission to stop or slow down the practice of illegal music downloading online.
Their special target, as most people know, has been college students, with some seeing their very education come under threat for what used to be a time-honored tradition -- copying their friends' music.
That copying, of course, has taken on a much larger scale with the Internet, which allows students to share songs and albums by the thousands -- often without paying a dime.
"This is a form of tough love," said Jonathan Lamy, a spokesman for the RIAA in Washington, which is made up of the biggest music industry labels. Last February, in an effort to step up the pace, the RIAA began sending "pre-lawsuit letters" to universities, which then forward them on to students associated with certain Internet accounts in question. The RIAA asks first for a few thousand dollars in payment and warns that the computer owner could face a federal lawsuit.
No room for negotiation
Much like the New York mob family in "The Sopranos," the RIAA is trying to send a blunt message -- that downloading free music using peer-to-peer networks could cost them dearly.
I don't condone music piracy, but the RIAA's tactics are nearly as bad as the actions of mobsters, real or fictional. The analogy comes up easily and frequently in any discussion of the RIAA's maneuvers.
Lawyers, who are defending alleged music pirates, say the biggest problems are: There is no room for negotiation with the RIAA, many students are wrongfully targeted, and most are settling for several thousand dollars because they fear even bigger legal costs or fines down the road.
"My students were saying it's extortion," said Robert Talbot, a professor at the University of San Francisco School of Law. Talbot teaches an Internet and intellectual property clinic, and now many of his law students are volunteering to help those who receive threatening letters from the RIAA.
"The letters are kind of scary," said Talbot. "These are usually kids who are 17 or 18 years old, they don't have any money and they are scared."
Talbot said his students are working on one case where four kids share one computer. "Students are trying to negotiate, but I don't have much hope. They don't want to negotiate. It's pay up or we go into federal court."
Going to court
The music industry had its first big win last October when a jury in Duluth, Minn., found Jammie Thomas, a single mother of two, liable for copyright infringement and ordered her to pay $9,250 for each of the 24 shared songs cited in the lawsuit, or a total of $222,000.
The tactics by the RIAA were highlighted in a more recent lawsuit, filed last week in a federal court in Portland, Ore., which alleged that the group is violating federal racketeering laws under the Racketeer Influenced and Corrupt Organization Act.
In that case, which was nearly thrown out by the judge, plaintiff Tanya Andersen alleges in an amended complaint that music industry defendants engaged in a campaign of "threat and intimidation," "using flawed and illegal private investigation information," in an attempt to "coerce payment from private citizens across the United States."
The RIAA says it has been sued at least four or five times in cases involving RICO statutes, and none of these suits has prevailed.
"They have been invariably rejected by the courts," Lamy said. He also said that the RIAA has negotiated with many students. "We don't have any interest in bringing a lawsuit against the wrong person," he added.
The original RIAA case against Andersen was eventually dismissed. It was discovered that her computer was not used to download the music in question, but she has countersued for legal fees. The amended complaint filed in Oregon seeks class-action status for other people victimized by the anti-piracy campaign by the RIAA and at four record companies.
When asked for financial specifics on what kind of damage students are doing to the recording industry, the RIAA says it does not have data on piracy at universities, but global music piracy causes $12.5 billion of economic losses every year and 71,060 jobs in the U.S. have been lost, citing data from the Institute for Policy Innovation.
Another data point, however, seems to indicate that though the RIAA's efforts are filling its coffers with millions of dollars, its letters and suits may not even be deterring music piracy. Fred von Lohmann, a senior intellectual property attorney with the Electronic Frontier Foundation, said recent data from Big Champagne of Los Angeles indicate that there is "more file sharing than ever before." Lamy of the RIAA said peer-to-peer traffic is "essentially flat."
Defense lawyers say most students who get these letters are settling for an average of $4,000. The RIAA says settlements suggested in the pre-lawsuit letters are within the bounds of copyright laws, and are even less than what the law allows.
"Copyright law allows from $750 up to $150,000 per work," Lamy said.
It isn't right to jeopardize someone's education. Granted, some wealthier students just show the letter to their parents, who quickly pay to make the case quietly go away. The RIAA should just charge students double the rate of a song on iTunes (99 cents) for every song they are found downloading. But Lamy said settlements need to be of "consequence" to deter the activity in the first place.
Von Lohmann and the EFF have long been arguing that the RIAA campaign is unwise and unfair. The music industry is using scare tactics to bilk millions of dollars from college students who can ill afford it as a stop-gap measure while it tries to figure out a business model as it goes through its biggest seismic shift ever. Even Apple (AAPL:
which created the most successful way to sell digital music legally through iTunes, is reportedly looking at new options for selling digital music. See full story.
"In three to four years when you figure out your business model, what are you going to say to the thousands of kids who had to drop out of school?" von Lohmann said. "Are you just going to say, I'm sorry?"