Napster. Kazaa. Morpheus. Gnetella. These file-swapping services have been the focal point of a new ethical dilemma, for which there are few precedents. Online file-swapping services allow novice computer users to access, download, and listen to copyrighted music files without compensating the artists, record companies or publishers involved. Is this behavior ethical?

Courts have ruled mostly in favor of the artists and record companies on this issue, citing tributary copyright infringements by file-swapping services. Tributary infringement involves not "violating copyright itself but of contributing to and facilitating other people's infringement." ^{(Greenfeld 64)} File-swapping services function through peer-to-peer trading ("disintermediation") and do not store any copyrighted materials on their servers. Many people who engage in music piracy do not believe they are doing anything wrong. Is it wrong to freely distribute and download copyrighted music over the Internet? (Most certainly.) This article outlines the ethicality of file-swapping and provide ethical alternatives and recommendations based on the ethical decision.

Piracy and Bootlegging

The unauthorized distribution of copyrighted music files as come to be known as "piracy". Yet there is a subtle difference between piracy and bootlegging. Bootlegging involves the distribution of non-commercially available versions of songs, such as live concerts, outtakes, studio banter, remixes, scrapped songs, et cetera. Bootlegging is not considered as serious an issue for two reasons: The songs are not commercially available, yet demand is high enough for production. Also, the ones buying or trading bootlegs are usually completists (i.e. huge fans) of a given group, and likely have everything commercially available by that group, but still crave for more. Record companies are not losing money to bootlegs for the simple fact that they are not releasing those recordings in the first place. Napster and other file-swapping services, while having their share of bootleggers, also have their share of pirates.

Piracy, on the other hand, involves the willful copying and distribution of commercially available music. I was at a fairly large yard sale earlier this year and I stopped at a booth where a woman was selling CDs. I noticed that the cover art for the albums was printed with a cheap Inkjet printer, and the discs inside were obviously CD-Rs. I was so repulsed by the outfit that at first I didn't respond to her salesman banter. When I noticed that the CDs included such major artists as Janet Jackson and Bob Marley; I thought, "Virgin Records and Tuff-Gong Records won't get a dime for this sale, neither will Ms. Jackson or Bob Marley's estate." Piracy reared its ugly head that day; there are "enterprising" people out there who think it is perfectly legal to directly profit from another's work.

When the theft of intellectual property occurs, such as in the above real-life example, the creator literally becomes a slave to the thief, as his work is for naught. Many people who are pro-file swapping may draw the line and state that a publisher's copyright is infringed when others profit from distribution, such as the woman at the yard sale booth. But people who swap copyrighted files on the Internet are also guilty of profiting, even though no money is exchanged. An intangible good is received, yet no compensation is remitted to the publisher or copyright holder.

MP3s

Although the practice of copying music has been around for decades, only since the advent of Napster in 1999 has the distribution of copied music been so inexpensive, fast and readily available to the public. ISO-MPEG Audio-Layer 3 (MP3 for short) was developed in 1987 and slowly became the primary audio file format, compressing digital information from a typical CD track to a three- or four-megabyte audio file. But MP3 has its flaws. While encoding music at the standard rate of 44.1 khz, MP3 files contain about only 10% of the information found on CD tracks. MP3 is a lossy format: when you compress a music file to MP3, you can not decompress it later to its prior uncompressed state. For many casual listeners however, an MP3 file sounds "good enough"; many cannot tell the difference between a song played from a CD and from an MP3 file. Taken from a purely audiophile standpoint, the prevalence of MP3 files represents a sound quality digression. This compressed format, while ideal for audio books and the like, is considered unacceptable to many music archivists and collectors.

Unauthorized MP3 trading deprives the record companies and, likewise the artists, of income. According to industry statistics, overall music sales are down 10.4 % this year compared with the same time period in 2002; CD sales alone are slumping 7.3% ^{(Billboard Magazine)} A study released in May 2000 by Soundscan, Inc. found a sharp decrease in CD purchases around college campuses, places where file-swapping is prevalent. ^(Enos) If a music fan has the choice between downloading an album's worth of MP3s from the Internet, or walking into a store and purchasing a CD, and chooses the former, he is directly depriving the record company and the artist of due compensation. Says an anonymous user of slashdot.com:

The ethics lie not in the loss that theft incurs, but in the basic idea that you should pay money for music you enjoy. The artists and labels choose to distribute their music through sales of various media, and it's only because someone chooses to . . . circumvent those distribution channels that you are able to get songs for free online. ^{(slashdot.com)}

Copyrights

A copyright is a copyright regardless of the wealth of the music company or individual who holds it. File-swapping to protest the wealth or "oppressiveness" of a company is a weak rationalization for theft and will not fly in other venues. Consider, for example, Microsoft's monopoly of operating systems. If an individual believes the price of Windows XP to be too steep, or Microsoft's monopoly of the industry too oppressive, does this rationalize his walking into a store and stealing the software?

Warning: All Rights Reserved. Unauthorized duplication is a violation of applicable laws. I glance at the back of a Bee Gees' CD case and find this warning. Similar warnings and statements are found on most CDs containing copyrighted music. "All Rights Reserved" means that the rights to copy the sound recordings are reserved for the publisher — in this case, Polydor Ltd. (UK). "All Rights Reserved" is used "to ensure protection in certain Latin American countries that do not recognize Copyright, Copr., or © as proper notice of a claim of rights." ^{(Strong 95)} The mass market must not be reading this fine print, as "...78 percent of those who have downloaded music files . . . do not believe that downloading and sharing music files for free is stealing." ^{(Pew Internet & American Life Project)} If they don't believe it's stealing, then what part of "All Rights Reserved" do they not understand? "Clearly, the fact that it is so easy to copy digital material makes it hard to outlaw doing so, and people seem to be inclined to do what is easy and fun." says Bill Joy, chief scientist at Sun Microsystems. "Theft in the digital world does not seem to carry the moral frightening of theft in the material world — of shoplifting a CD for example." ^{(Joy 72)} Similarly, a music store will be apt to press charges for physical theft, but Internet theft seems to occur "under the radar."

Like every controversial issue, there are at least two sides to every coin. "[People] tend to adhere to one of two rival information-age ideologies: the info-anarchists' rallying cry that 'information wants to be free' or the entertainment industry's insistence that content creators must get paid or there will be no new art [or music] to download." ^{(Cohen 69)} Consumers will benefit in the short term from "free" information, but as time progresses, artists will realize that there is no profit in creating intellectual property and will look for new work. Coincidentally, I was at a dinner party Friday night and was talking with a man in the medical illustration business. He told me he spends as much as two-thirds of his work day either hunting down copyright infringers or dealing with legal issues surrounding his vast collection of copyrighted illustrations.

Many organizations involved in litigation against file-swapping services (such as the RIAA, and the major music labels) have come under fire for attempting to halt the free distribution of music. Indeed, copyright laws were enacted to guarantee a mechanism for recognition of payment, not to prevent distribution. But when file-swapping services do not provide a means by which to compensate the copyright holder, they and their users are in direct violation of copyright law. In late 2000, Napster allied itself with German media giant Bertelsmann, in an attempt to offer a membership-based music service to replace Napster's original format (and mostly likely to legitimize its tarnished image). This service would compensate record companies and artists for consumer's downloads. ^(Enos) This prospect never really got off the ground because after the courts shut Napster down in 2001, file-swappers jumped ship to competing free file-swapping services.

The Digital Millennium Copyright Act

The Digital Millennium Copyright Act, or DMCA, was enacted in 1998. The DMCA seeks to "...update U.S. copyright law for the digital age in preparation for ratification of the World Intellectual Property Organization (WIPO) treaties." ^{(University of Texas)} The DMCA also deals with fair use in a digital environment, a topic which I have omitted in the interest of brevity. DMCA has been shunned by the file-swapping public as favoring the record companies and copyright holders. That it benefits the copyright holders should be self-evident. Record companies are in the music-selling business, not philanthropy.

The DMCA also rightly absolves Internet Service Providers from liability if copyrighted files are unlawfully distributed via their networks. This is sensible: ISPs are merely media; what one chooses to do with them could have good or bad consequences. To blame ISPs for copyright infringements would be equivalent to blaming auto makers for drug trafficking that is committed in their vehicles. Lawmakers are not going after ISPs, but after file-swapping services, and more recently, individuals who distribute these files.

In April 2003, the Recording Industry of America (or RIAA) sued four college students accused of distributing hundreds of thousands of copyrighted files. The RIAA is seeking the full $150,000 for each copyright violation. "...some believe the recording industry is so fed up with the continuing problem of illegal file swapping that it's trying to send a message to administrators and students." ^(Dean) Whether or not the RIAA's actions are effective in the long term remains to be seen.

Ethical Decisions

The principle of consequentialism focuses on the ends, or results of an action, and is useful for determining a given action's ethicality. ^{(Kallman 16)} The ethical dilemma at stake is distributing and downloading copyrighted music without consent of the publisher or copyright holder. If the action is taken, is anyone harmed? Minute financial harm is incurred if one person downloads one song and forgoes purchasing it legitimately. Yet, collectively, the actions taken by tens of millions of downloaders amount to a real financial loss for publishers and copyright holders. Just days before Napster was to shut down forever, traffic was estimated in upwards of approximately 50 million worldwide users, downloading over one billion tracks daily. ^{(USA Today)} It is no wonder that sales sank about 7% that year. ^(RIAA)

Consequentialism also asks if the action is taken, who will benefit? File-swappers benefit in the short term in that their money can be saved and their hard drives can be filled with songs. But theft in any venue has its consequences. CD prices may be raised. Promising new artists may not get signed to record deals. Production values may decline. Fewer albums may be recorded and released. Record companies are already diverting their attention from artists and bands to anti-copying measures, such as watermarked CDs and DVDs that resist duplication. The advent of widespread music duplication has made the music industry re-think how it markets CDs. Value-added albums, such as those that contain bonus DVDS or computer software have been introduced in order to persuade fans to purchase music legitimately.

Kant's categorical imperative is another useful principle in determining the ethicality of a given action. Kant's imperative has two facets: consistency and respect. ^{(Johnson 44-47)} If everyone were to share music files, would we be better off? No. File-sharing services have turned this statement from a supposition into a reality. File-sharing, it can be argued, has reached a saturation point; everyone who is interested in downloading music is probably doing so. Real losses have been incurred because of these actions, with overall music sales dropping by over seven percent for two consecutive years. ^(RIAA)

If people were to share music files, who would be treated with disrespect? Artists, first and foremost, would be disrespected; many well-known major-label artists have voiced their concerns about file-swapping. Publishers, copyright holders and music labels would also be disrespected, as the file-sharer circumvents the common distribution channels established by the record companies. This deprives the publishers of income and means decreased royalties for artists.

In short, there are two scenarios: One, the record industry becomes unprofitable because of pirated music. Two, the record industry flourishes and signs more artists when consumers purchase music legitimately. Based on the ethical decision-making process, there are two recommended options:

• Purchase music in ways that ensure that the publisher and/or copyright holder receives compensation on your acquisition of the copyrighted sound recording.
• Refrain from downloading pirated music.

Swapping copyrighted files is illegal. Circuit and state courts have ruled almost unanimously against file-swapping services and individuals who engage in such activity. However, in many people's minds, there is a gray issue as to the ethicality of distributing and downloading copyrighted music. Decisions need to be made, both by lawmakers and the music industry, regarding the prevalence of music copying and distributing technology. Existing laws regarding fines for infringements should be enforced. Most people who engage in file trading, as mentioned above, do not believe that what they do is stealing. An education campaign, perhaps sponsored by the RIAA, may help to change the minds of millions of file-traders.

Related article

• Psychological Effects of Materialism and Work on Happiness