Now it's war. The trade association representing the nation's biggest record labels said Tuesday it is gearing up to file thousands of lawsuits against individuals who share music files online. The announcement by the Recording Industry Association of America comes in response to declining music sales, widespread music piracy and a recent favorable court decision. The move promises to put the music industry in the legally defensible, but consumer-hostile, position of threatening hordes of music listeners with stiff fines and criminal penalties. And the uncertain legal, economic and image-affecting consequences of the RIAA's move contribute to further murkiness for the world's five biggest record companies: AOL Time Warner's ( AOL) Warner Music Group, Vivendi Universal's ( V) Universal Music Group, Sony's ( SNE) Sony Music Entertainment, EMI Group and Bertelsmann's BMG Entertainment. "I certainly understand what the RIAA is doing -- I don't blame them for doing this," said Joe Kraus, co-founder of the DigitalConsumer.org consumer advocacy group. "I question whether it's going to be effective." The record industry evidently has decided that it can no longer afford to play Mr. Nice Guy. In 2002, U.S. labels shipped 803.3 million CDs, down 15% from the 942.5 million shipped in 2000, the industry's peak year. The record labels blame that decline primarily on offline and online piracy, though outsiders often say the industry overemphasizes the effect of online piracy and overlooks the music industry's internal problems. "Once we begin our evidence-gathering process, any individual computer user who continues to offer music illegally to millions of others will run the very real risk of facing legal action in the form of civil lawsuits that will cost violators thousands of dollars and potentially subject them to criminal prosecution," RIAA President Carey Sherman said in a statement. Making the RIAA's task easier is an appeals court's decision earlier this month that Verizon ( VZ) had to turn over to the RIAA the names and addresses of customers that the RIAA says illegally made music available online via file-sharing networks.
After losing a round to the RIAA over the customer information requests -- requests enabled by the Digital Millennium Copyright Act of 1998 -- Verizon appealed the case. But in the meantime, Verizon was forced to turn over the names of four of its Internet customers that the RIAA was seeking. If the RIAA were to request additional names in the coming weeks, "it appears we would have to comply," said Sarah Deutsch, Verizon associate general counsel. But since the case is on appeal -- oral arguments are scheduled for Sept. 16 -- any additional requests by RIAA before the appeal would amount to "misuse of process on a mass-scale basis," said Deutsch. An RIAA spokesperson didn't respond to a message requesting comment.