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    LimeWire Strikes Back against the RIAA (Cartel?)

    Sarah Simmons, Samuelson Law, Technology & Public Policy Clinic, UC-Berkeley School of Law (Boalt Ha, October 13, 2006

    Abstract: LimeWire appears to be fighting back hard against the RIAA. In answer to the RIAA’s August lawsuit against LimeWire (Arista v. LimeWire), LimeWire has responded aggressively with a counterclaim against the RIAA alleging illegal cartel formation resulting in antitrust violations, consumer fraud, and other misconduct.

    LimeWire is among the last of the original peer-to-peer file-sharing sites. It is a lone foothold in the aftermath of what has been a successful battle by the Recording Industry Association of America (RIAA) to dismantle the peer-to-peer file-sharing scene.

    However, after LimeWire refused to comply with the RIAA’s September 13, 2005 cease and desist notice, the entertainment industry attempted to settle its score with LimeWire. Thus, this August, thirteen record companies, including Warner Brothers Records, Virgin Records America, and Sony BMG Music Entertainment, filed a lawsuit against LimeWire in the U.S. District Court for the Southern District of New York. This lawsuit alleged that LimeWire was “actively facilitating, encouraging and enticing LimeWire users to engage in [copyright infringement].” (Complaint, paragraph 59, page 16).

    After this lawsuit was filed, it appeared that LimeWire, like the other US-based peer-to-peer clients, would meet its demise as so many peer-to-peer technology companies have before. However, the LimeGroup, LimeWire’s wealthy umbrella company, is showing no fear toward the prospect of taking on the powerful music and entertainment industry. In fact, LimeWire not only appears to be fighting back against the RIAA; it appears to be fighting back hard.

    Thus, on September 25, 2006, LimeWire filed a counterclaim against the RIAA, alleging that the music industry has formed an illegal cartel, conspiring to restrain trade in the market for online music distribution in violation of the Sherman and Clayton Acts, and thus committing antitrust violations, consumer fraud, and other misconduct.

    In the counterclaim, LimeWire stated that “[the RIAA’s] goal was simple: to destroy any online music distribution service they did not own or control, or force such services to do business with them on exclusive and/or other anticompetitive terms so as to limit and ultimately control the distribution and pricing of digital music, all to the detriment of consumers.” (Counterclaim, paragraph 26, page 18). In addition, LimeWire explained in its counterclaim that “[t]his case is but one part of a much larger modern conspiracy to destroy all innovation that content owners cannot control and that disrupts their historical business models.” (Counterclaim, paragraph 28, page 18).

    According to techdirt, if “the RIAA loses on the antitrust tissue, it could have a big impact on the traditional labels, and could actually be a catalyst towards forcing them to accept the changing nature of the market.”

    For all those interested in retaining and restoring consumers’ fair use rights to copyrighted material, LimeWire’s counterclaim has made Arista v. LimeWire a very interesting case to watch.

    Link to previous Limewire cease and desist notice in the Chilling Effects database:

    RIAA C&D's University of North Carolina for Ace of Base


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