FTC takes action against "100% legal" P2P site
The FTC obtained a preliminary injunction on October 21st in FTC v. Myrics,Download file, against the operator of MP3DownloadCity.com, which claimed that file-sharing is "100% legal." The FTC charged that the site operator violated Section 5(a) of the FTC Act, by falsely claiming that membership in its service made P2P file sharing legal. The site was not a licensed music subscription service but rather a paid tutorial service that promoted the use of file-sharing software.
The site advertisements included:
"AND BEST OF ALL PEOPLE ARE NOT GETTING SUED FOR USING OUR SOFTWARE. YES! IT IS 100% LEGAL; Why Are We The #1 Free MP3 Music Download Site? . . . Download and Watch DVDs and Movies Still in Theaters; and Rest assured that File-Sharing is 100% legal."
The order restricts misrepresentations such as these. However it also prohibits the following:
"Failing to clearly and conspicuously disclose, prior to the time that a consumer purchases any good or service from Defendant, all material information relating to the consumer's decision to purchase any good or service, including where applicable:
"1. that persons who download copyrighted material, or make it available to others, without the copyright owner's permission, may be liable for copyright infringement, which can result in significant monetary damages, fines and even criminal penalties; and
"2. that persons who subscribe to Defendant's MP3DownloadCity.com service do not thereby obtain a license to download copyrighted music, movies or games."
This consumer disclosure requirement could conceivably apply in other contexts where consumers are involved with unlicensed content, even if they the particular situation does not involve the egregious conduct in this case.
See also the complaint, temporary order, and the FTC release.
The MPAA also recently sued a number of similar web sites for inducing copyright infringement by falsely claiming that consumers can legally download copyright movies from these unlicensed web sites. See MPAA release.
