Grokster Shuts Down

Major file-sharing service closes, pays $50 million settlement

November 8, 2005 12:00 AM ET

Grokster, the leading file-sharing service that lost a Supreme Court fight in June, agreed to shut down Monday and pay $50 million to settle piracy complaints charged by the music and movie industries.

According to court papers, the settlement permanently bans Grokster from participating directly or indirectly in the theft of copyrighted files and from giving away its software. Mitch Bainwol, chief executive of the Recording Industry Association of America, said the settlement was "a chapter that ends on a high note for the recording industry, the tech community and music fans and consumers everywhere."

Last June, the Supreme Court ruled that the entertainment industry can file piracy lawsuits against technology companies -- such as Grokster -- that allow customers to rip music and movies over the Internet.

"There are legal services for downloading music and movies," a message on Grokster's Web site said Monday. "This service is not one of them." A legal, fee-based "Grokster 3G" will launch before the year's end under a new parent company.

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