Peer-to-peer file sharing service Kazaa has lost a landmark legal battle in the US and Australia that outlaws its current worldwide operations, but the company claims it will launch a legitimate replacement facility.
The internet company has been found guilty of breaching copyright law after a longstanding supreme court case with record companies. Kazaa has paid a compensation fee believed to be in the region of $100 million (£54 million) in an out of court settlement.
In response to today's loss Kazaa has pledged to introduce file filtering technologies that prohibit users from exchanging files that incorporate copyright measures.
John Kennedy, chairman and chief executive officer of the International Federation of the Phonographic Industry, among the groups that brought the action against Kazaa, said that the file sharing company "was an international engine of copyright theft which damaged the whole music sector and hampered our industry's efforts to grow a legitimate digital business".
"It has paid a heavy price for its past activities. At the same time Kazaa will now be making a transition to a legal model and converting a powerful distribution technology to legitimate use," he said.
Mr Kennedy explained that today's ruling was still a "win-win" scenario for all concerned parties, as he looked forward to a "new business partner" relationship with Kazaa.
At its peak, the peer-to-peer service is estimated to have had 4.2 million worldwide users simultaneously online, while by 2003 about 240 million downloads were believed to have been made via it.
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