File swipers everywhere can breathe a sigh of relief. Their peer-to-peer (P2P) "sharing" networks are safe, for the time being.
The "Induce" act, Senate bill 2560, would have amended U.S. statutes to treat anyone who "induces" copyright violation to be treated the same way as an infringer of copyright law. It was aimed directly at P2P networks that traffic in illegally copied music, movies, porn, and other digital delights.
When word of the legislation first came out, the screams of the illegal download crowd were audible across the globe. After all, no one likes having to actually pay for thousands of hours worth of music when it can be obtained for free. Eager to slag the bill by any means, even otherwise-responsible news organizations repeated the bombastic claim that the very symbol of digital music, Apple's (NASDAQ:AAPL) iPod, could fall victim to the Feds.
Of course, that was largely untrue. Anything for a snazzy headline. The "reasonable person" standard required by the legislation is certainly vague, but it would be tough to argue that Apple, Microsoft (NASDAQ:MSFT), Dell (NASDAQ:DELL), Audible (NASDAQ:ADBL), Loudeye (NASDAQ:LOUD), Hewlett Packard (NYSE:HPQ), and others were intentionally inducing copyright violations when they spend so much time on digital rights management efforts. On the other hand, P2P providers would have a much tougher time trying to defend the traffic on their networks.
As of last week, Senator Orrin Hatch (R-Utah) -- whose own website describes him as an "exceptional singer, songwriter, and composer" -- hadn't managed to move the legislation through the Judiciary Committee, though he chairs it. Thus, the bill is likely to die a quiet death.
That means online music businesses like iTunes, MSN Music, and Wal-Mart (NYSE:WMT) will have to compete with free services. Though they're off to a roaring start, it will be a long road to profitability.
For related Foolishness:
- The reports of the iPod's death were exaggerated.
- Europe does like U.S.
- How about some truth in numbers?
Fool contributor Seth Jayson is eyeballing a Rio Carbon, but he wonders if the Feds are eyeballing him. He owns none of the stocks mentioned in this article. View his Fool profile here.
