Music industry warns Kuro allies

"This is war. We will do something to enhance our relationships with our allies."

Philip Wang, a Kuro spokesman

Companies that invest in file-sharing or peer-to-peer Web sites and those that help them collect their monthly subscription fees should reconsider co-operating with the sites now that prosecutors have filed charges against Taiwan's largest on-line file-sharing site, Kuro.com.tw (飛行網), the music industry warned yesterday.

"The International Federation of the Phonographic Industry [IFPI] Taiwan calls for existing investors and potential investors to seriously consider their investments in unauthorized peer-to-peer network operators," IFPI Taiwan branch secretary-general Robin Lee (李瑞斌) told reporters yesterday.

The IFPI, which represents 10 local and international record labels, has claimed that Kuro and similar sites infringe on their members' copyrights by allowing subscribers to share and download music files without paying royalty fees.

In August the federation took the complaint to prosecutors. Last Thursday, the Taipei District Prosecutors' Office formally filed charges against three senior directors at Kuro and one subscriber, claiming they infringe on the nation's recently amended Copyright Law (著作權法).

Kuro has 500,000 subscribers, according to the site's operators, each paying NT$99 per month to use the peer-to-peer service that allows them to find friends, share music and video files, and access a digital magazine.

Companies that currently collect the monthly subscription fee for Kuro include big names such as President Chain Store Corp (統一超商), Visa, Mastercard, FarEas-Tone Telecommunications Co (遠傳電信) and Taiwan Cellular Corp (台灣大哥大).

"IFPI seriously advises those who collect money on Kuro's behalf to reconsider the legality of their business activities with Kuro," Lee said.

Kuro fired back yesterday that the IFPI was in for a fight.

"We take the tactics they are using very seriously as we think it will do some damage to our allies," Kuro spokesman Philip Wang (王立文) told the Taipei Times yesterday.

"This is war. We will do something to enhance our relationships with our allies," Wang said, without elaborating.

Wang said a more sinister desire to control how music is packaged and sold is the reason for the music industry's relentless pursuit of his company.

"They are targeting Kuro as Kuro is a threat to traditional music publishing channels," he said. "That is why they are trying by all means to kill us."

An offer to charge Kuro users an extra NT$50 per month as a form of royalty for the music industry was rejected, showing the IFPI was not serious about coming to an agreement, Wang said.

The IFPI's campaign against Kuro may have had some success. Government-owned Chunghwa Telecom Co's (中華電信) Hinet Internet service removed the ability to pay Kuro from its Web site earlier this year.

But others are adopting a wait-and-see approach.

"This is an ongoing case and it is not suitable to talk about the legality of Kuro's business until we see the final result. But if the outcome is that Kuro is illegal, FarEasTone would certainly not want to be associated with any illegal business," said FarEas-Tone vice president Liang Jin-lin (梁錦琳).

The news comes as Taiwan tries to show it is cracking down on intellectual property rights infringers in the face of criticism from foreign governments. In October, the government announced that the Internet was its new front in the war against piracy after successfully increasing seizures of bootlegged audio, video and software disks this year. The case against Kuro is the first criminal case against a peer-to-peer Web site here.