Kazaa is commonly used to exchange MP3 music files over the Internet. However it can also be used to exchange other file types, such as videos, applications, and documents. The official Kazaa client can be downloaded free of charge, bundled with adware and spyware, although there are "No spyware" claims found on Kazaa's website. Throughout the past few years, Kazaa's developing company has been the target of many copyright-related lawsuits.
Initially, most users of Kazaa were users of the Morpheus program, formerly a client of MusicCity. But once the official Kazaa client became more widespread, its developers used their ability to automatically update it, changing the protocol in February 2002, to shut out Morpheus clients when its developers failed to pay license fees. Morpheus later became a client of the Gnutella network.
Consumer Empowerment was sued in the Netherlands in 2001 by the Dutch music publishing body, Buma/Stemra. In November 2001, the court ordered Kazaa's owners to take steps to prevent its users from violating copyrights, or else pay a heavy fine. Consumer Empowerment responded by selling the Kazaa application to a complicated mesh of offshore companies, primarily Sharman Networks, headquartered in Australia and incorporated in Vanuatu. In late March 2002, a Dutch court of appeal reversed an earlier judgment, and stated that Kazaa was not responsible for the actions of its users. Buma/Stemra lost its appeal before the Dutch Supreme Court in December 2003.
However, the legal problems for Kazaa were only just beginning. Kazaa's new owner, Sharman, was sued in Los Angeles by the major record labels and motion pictures studios and a class of music publishers. The other defendants in that case—Grokster and MusicCity (makers of the Morpheus file-sharing software)—initially prevailed against the plaintiffs on summary judgment (Sharman joined the case too late to take advantage of that ruling). The summary judgment ruling was upheld by the Ninth Circuit Court of Appeals, but unanimously reversed by the US Supreme Court in a decision titled MGM Studios, Inc. v. Grokster, Ltd..
Following that ruling in favor of the plaintiff labels and studios, Grokster almost immediately settled the case. Shortly thereafter, on 27 July 2006, it was announced that Sharman had also settled with the record industry and motion picture studios. As part of that settlement, the company agreed to pay $100 million in damages to the four major music companies—Universal Music, Sony BMG, EMI and Warner Music—and an undisclosed amount to the studios. Sharman also agreed to convert Kazaa into a legal music download service.Like the creators of similar products, Kazaa's owners have been taken to court by music publishing bodies to restrict its use in the sharing of copyrighted material.
While the U.S. action was still pending, the record industry commenced proceedings against Sharman on its home turf. In February 2004, the Australian Record Industry Association (ARIA) announced its own legal action against Kazaa, alleging massive copyright breaches. The trial began on 29 November 2004. On 6 February 2005, the homes of two Sharman Networks executives and the offices of Sharman Networks in Australia were raided under a court order by ARIA to gather evidence for the trial.
On 5 September 2005, the Federal Court of Australia issued a landmark ruling that Sharman, though not itself guilty of copyright infringement, had "authorized" Kazaa users illegally to swap copyrighted songs. The court ruled six defendants—including Kazaa's owners Sharman Networks, Sharman's Sydney-based boss Nikki Hemming and associate Kevin Bermeister—had knowingly allowed Kazaa users illegally to swap copyrighted songs. The company was ordered to modify the software within two months (a ruling enforceable only in Australia). Sharman and the other five parties faced paying millions of dollars in damages to the record labels that instigated the legal action.
On 5 December 2005, the Federal Court of Australia ceased downloads of Kazaa in Australia after Sharman Networks failed to modify their software by the December 5th deadline. Users with an Australian IP address were greeted with the message "Important Notice: The download of the Kazaa Media Desktop by users in Australia is not permitted" when visiting Kazaa website. Sharman planned to appeal the Australian decision, but ultimately settled the case as part of its global settlement with the record labels and studios in the United States.
In an unrelated case, Sharman Networks and Nikki Hemming, the Kazaa CEO, is suing Canadian digital media news site p2pnet, claiming it defamed Hemming in an article quoting an Associated Press story and a reader's comment.
"The suit, launched by Sharman Networks' Nikki Hemming, has attracted considerable international attention because of the parties involved - Sharman Networks is the Australian-based owner of Kazaa, the peer-to-peer file sharing service that last week agreed to pay the entertainment industry $100m (£53m) to settle ongoing litigation," says Geist in the article.
"It also highlights the vulnerability of thousands of individuals to defamation lawsuits merely for providing access to other people's comments. "Even individual bloggers who permit comments face the prospect of demands to remove content that is alleged to violate the law
"Both Sharman Networks and Hemming sued P2Pnet last spring, claiming that an article and accompanying comments posted by readers of the site were libelous.
"Jon Newton, the owner of the site, has vigorously disputed the suit, pointing to the need to protect free speech and to ensure that defamation laws cannot be used to stifle comment.
"Sharman Networks recently dropped its claim, however the Hemming suit continues."
Newton has elected to go to trial and the case is expected to be heard in Vancouver, British Columbia, Canada, sometime in 2008. p2pnet is based on Vancouver Island off the BC mainland.
Malware installed by Kazaa includes the following:
Kazaa is also known not to uninstall completely, leaving behind several executables, files, and the Kazaa installer. It also leaves behind all the malware initially installed. In an effort to remove the files left behind, Merijn Bellekom (the creator of HijackThis) has created KazaaBeGone, attempting to remove any remnants left behind by Kazaa's uninstaller program.
Some users still use the old network on the unauthorized versions of Kazaa, either Kazaa Lite or Kazaa Resurrection, which is still a self-sustaining network where tens of thousands of users still share unrestricted content. This fact was previously stated by Kazaa when they claimed their fastrack network was decentralized (like the old Napster), but instead a link up between millions of computers around the world.
However, in the wake of the bad publicity and lawsuits, the numbers of users on Kazaa Lite has dropped dramatically. They have gone from several millions users at a given time to mere hundred thousands or now just tens of thousands. Before, all users were combined on the same fastrack network, with some using the ad-supported Kazaa, and others using Kazaa Lite and other non-authorized versions all sharing countless songs, movies, etc. The size of the lawsuits Kazaa settled is said to only have been insignificant compared to the amount of media that was illegally duplicated and delivered to millions of users on Kazaa previously to the suit.
Without further recourse, and until the lawsuit was settled, the RIAA actively sued thousands of people across the USA for sharing copyrighted music across the network. College campus networks were also a focus of the RIAA's many lawsuits. Many of these cases are still in the process of being settled or are headed for trial. Although the lawsuits were mainly in the United States, other countries also began to follow suit.
Kazaa Lite is an unauthorized modification of the Kazaa Media Desktop application which excludes adware and spyware and provides slightly extended functionality. It became available in April 2002. It can be downloaded free of charge, and as of mid-2005 was almost as widely used as the official Kazaa client itself. It connects to the same FastTrack network and thus allows to exchange files with all Kazaa users, and was created by third party programmers by modifying the binary of the original Kazaa application. Later versions of Kazaa Lite included K++, a memory patcher that removed search limit restrictions, multisource limits, and set one's "participation level" to the maximum of 1000. Sharman Networks considers Kazaa Lite to be a copyright violation.
After development of Kazaa Lite stopped, K-Lite v2.6, Kazaa Lite Resurrection and Kazaa Lite Tools appeared. Although K-Lite is related to Kazaa Lite and the name sounds similar, they are actually different projects. K-Lite is not an update to Kazaa Lite, and was instead written as a separate loader with many fundamental changes. Unlike Kazaa Lite, which is a modification of an old version of Kazaa, K-Lite v2.6 requires the original KMD 2.6 executable to run. K-Lite doesn't include any code by Sharman: it requires the user to supply the original, unpatched Kazaa Media Desktop, which is executed in an environment which removes the malware, spyware and adware and adds features. It is believed this version might therefore be legal because an original binary is required. Since this client uses a newer version of the actual Kazaa program, it may not be affected by attempts to block Kazaa Lite from the FastTrack network.
In November 2004, the developers of K-Lite released K-Lite v2.7, which similarly requires the KMD 2.7 executable. Currently, other clean variants use an older core (2.02) and thus, K-Lite has some features that others will never have. K-Lite includes multiple search tabs, a custom toolbar, and autostart. It also has auto search more, a download accelerator, an optional splash screen, preview with option (to view files you are currently downloading), an IP blocker, Magnet links support, and ad blocking, although the clients based on the 2.02 core abstract these functions to third-party programs.
Kazaa Lite Tools is an update of the original Kazaa Lite, with modifications to the third-party programs included, it is newer and includes more tools.
Kazaa Lite Resurrection (KLR) appeared almost immediately after Kazaa Lite development was stopped in August 2003. Early reports on US national television claimed the original developers were behind KLR, however this is not the case. KLR is copy fo kazaa lite 2.3.3, with same tools as other versions and is maintained by FileSharingPlace.be - Home of Kazaa Lite Resurrection.