Kazaa in legal setback Down Under

In a win for the music business, a judge in Australia has ruled that the operators of the Kazaa file-sharing network authorised the widespread violation of copyright works. He ordered that significant changes be made to how the Kazaa service works.

Federal Justice Murray Wilcox, of the Federal Court of Australia in Sydney, stopped short of ordering that the peer-to-peer file-sharing service be shut down. But he said that changes must be made in order to prevent, to the extent possible, any further copyright violations.

The decision comes as a blow to Kazaa operator Sharman Networks, which has been battling the closely-watched case since early last year. The company said it was disappointed with the decision and vowed to appeal. The company will not comment further until it has studied the decision in detail, a spokeswoman said.

The case against Sharman Networks was filed by the local subsidiaries of most of the big recording labels, including Universal Music Group, Sony BMG Music Entertainment and EMI Group.

Sharman Networks, along with five affiliates named in the case, was ordered to pay 90 percent of the labels' legal costs. A further hearing will take place to determine monetary damages, Justice Wilcox ordered.