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Grokster Ruling Slows Illegal Downloading

Almost six months after the Supreme Court's Grokster decision, illegal peer-to-peer (P2P) music sharing is declining, according to market research firm NPD Group.

The Port Washington, N.Y.-based company says that from the time of the Supreme Court decision in June, the number of U.S. households that downloaded at least one song from an illegal P2P service fell by 11 percent, from 6.4 million households to 5.7 million.

The decline represents the largest percentage drop in illegal file sharing since the music industry unleashed an onslaught of infringement lawsuits in 2003. When the Recording Industry Association of America (RIAA) initially began suing individuals, the download rate dropped 35 percent.

"Last year's fourth quarter was a peak period for music file sharing, as users ended summer activities, returned to school, or were consuming the latest music releases," Russ Crupnick, music industry analyst for The NPD Group, said in a statement. "It wasn't until the Grokster decision that substantial reductions in the number of households downloading music occurred."

In June, the court ruled that P2P developers are legally responsible for the illegal acts of their users. The issue, the justices ruled, was not the technology involved in P2P technology, but the illegal business models of Grokster and other P2P music sites.

The decision was a major blow to the P2P sites, with Grokster closing in November.

Crupnick said. "If this trend continues throughout the remainder of the fourth quarter 2005 and into next year, it would signify a solid victory in the music industry's efforts against illegal music file sharing in the U.S."