P2P BearShare Pays $30 Million To RIAA, Shuts Down

BearShare, one of seven file-sharing sites threatened last fall by the Recording Industry Association of America (RIAA), agreed Thursday to pay $30 million to avoid piracy lawsuits.

Free Peers Inc., the company that distributed the BearShare peer-to-peer (P2P) software, will not only pay out the $30 million, but also agreed to shutter its operation and promised to stop promoting illegal music file transfers.

The Miami Beach, Fla.-based company was one of seven P2P providers that received cease-and-desist letters from the RIAA in mid-September 2005. Those letters were prompted by the earlier Supreme Court decision in MGM Studios v. Grokster, when the court ruled that file-sharing services were responsible for copyright violations if they intended customers to use software primarily to swap songs and movies illegally.

BearShare is the first of the seven to settle with the RIAA, although two others -- iHub2 and WinMX -- shut down rather than comply. A third, eDonkey, shifted to a fee-based structure a la Napster. eDonkey and the remaining letter recipients -- Warez P2P, Limewire, and Soulseek -- remain online and have not settled with the RIAA.

Other P2P vendors, including Kazaa and Morpheus, are currently defendants in a copyright infringement case pending in a Los Angeles federal court.

Oddly enough, BearShare's technology assets were acquired by iMesh, another file-sharing firm that's had a brush with the RIAA. In 2004, iMesh agreed to a $4.1 million settlement with the RIAA.

iMesh did not disclose the financial terms of the deal.

As of Friday morning, the BearShare site was still up and running.