News

The music industry intends to leave no stone unturned in its war on piracy. Just a week after reports emerged about crackdowns on sales of pirated CDs at flea markets and swap meets, the Recording Industry Association of America (RIAA) announced a campaign to eliminate sales of unauthorized discs at gas stations, grocery and convenience stores, and small independent music outlets.

On Monday, December 16, the RIAA issued cease-and-desist letters to 80 retailers throughout the US, threatening them with lawsuits if they don't stop making, distributing, and selling pirated music. Alleged copyright violators were also asked to fill out questionnaires about their music sales, to agree not to violate copyrights in the future, and to pay undisclosed settlement fees. Those who refuse to cooperate could be liable for damages of as much as $150,000 per copyright infringement. A judgment requiring payment for even one such violation would bankrupt most small retailers.

Previous anti-piracy efforts by the music industry have focused on large-scale operations. The move to crack down on small-time pirates is partly a reaction to the continuing decline in music sales, variously reported at between 5% and 10% per year. Downloading, private copying, and commercial piracy are all factors in the decline, according to RIAA chairman and CEO Hilary Rosen. "Piracy at the retail level is an increasing problem," she said. "These are legitimate retailers who ought to know better."

Pam Horovitz, president of retailers' organization the National Association of Recording Merchandisers (NARM), emphatically agreed. "Piracy like this hurts everyone in the food chain, including the vast majority of record retailers who operate legally and shouldn't have to compete with retailers who operate illegally," she stated. "Retailers who ignore the RIAA's warnings should know that they also stand to lose their membership in NARM, [since] piracy is not tolerated in our association."

The alleged violations were discovered by undercover investigators who purchased counterfeit products at each location and estimated how many bogus discs were in stock. Most of the cease-and-desist letter recipients had at least 50 counterfeit discs for sale, according to the RIAA. The trade association believes that the level of commercial piracy uncovered to date represents only a small fraction of the total. Rosen told reporters that the RIAA's threat of legal action is "clearly a warning with intention behind it . . . and we don't ever take warnings lightly.

"This new initiative should serve as a clarion call [to] retail outlets of all shapes and sizes that we take music piracy seriously, and [that] they need to get their house[s] in order," Rosen added. "No one should think they operate below the radar anymore." The RIAA estimates that piracy annually costs the music industry $300 million.