September 6, 2002 8:30 AM PDT

The week in review: Napster R.I.P.

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The last nails seem to be in the coffin for two of the earliest and most prominent file-swapping sites, but the battle isn't over for file-swappers.

In a decision likely to force Napster out of business, a federal judge blocked the $9 million sale of the onetime file-swapping powerhouse to German media giant Bertelsmann. The surprise decision isn't expected to have much effect on the tumultuous online music world, but the ruling does appear to close the book on a company that became a consumer favorite while being reviled by much of the entertainment industry.

Most of Napster's remaining 42 employees have been laid off, and visitors to the Napster home page found a stark message: "Napster was here."

The halt to the sale will have virtually no effect on the wars over music distribution online. File-swapping services remain as popular as they ever were in Napster's heyday.

In a second victory for the Recording Industry Association of America (RIAA), another judge said he would order the Madster file-trading system, formerly known as Aimster, to halt song-swapping. The judge said that Aimster, which played a brief but colorful role on the file-trading stage not long after Napster's appearance, was clearly responsible for large-scale copyright infringement.

"Defendants manage to do everything but actually steal the music off the store shelf and hand it to Aimster's users," the judge wrote.

The vast majority of file-traders have migrated to other platforms such as Kazaa, StreamCast Networks' Morpheus and iMesh.

However, the RIAA's Web site came under attack for the third time in five weeks, apparently by activists irate about the group's legal efforts to curtail music-swapping. Last weekend, it had been defaced to include a faux announcement that it would "offer the latest albums for download from RIAA.org" and a small collection of MP3 files.

File-swappers may have won a minor battle as major record labels in the United States have slowed controversial plans for making CDs more difficult to copy, even as tension over online music piracy mounts. "From our perspective, CD copy protection is unfortunately not as good as we'd all like it to be," said one music executive

On the docket
Legal battles over technology these days aren't limited to the music industry.

eBay is being threatened with a patent infringement lawsuit that could force it to modify its winning auction format. A loss could compel the Internet auction company to pay millions of dollars in royalties and damages and even to make significant changes to its business model.

An inventor and patent attorney who has been granted four online auction-related patents since 1998 said he sued eBay in 2001 after negotiations broke down over the auction site's offer to purchase his patents. At the heart of the case is patent paperwork filed less than five months before eBay founder Pierre Omidyar created the first iteration of his auction site in 1995.

Three consumer groups say that spam has become such a menace to the Internet that the Federal Trade Commission should take swift steps to stanch the flow of bulk e-mail. The groups suggest that the FTC outlaw commercial e-mail that misrepresents the content of the message or fails to provide a way to unsubscribe from the mailing list.

The proposal comes as concerns about spam grow more and more acute. Corporate networks are becoming so clogged by e-mail pitches for pornography, moneymaking schemes and health products that spam could make up the majority of message traffic on the Internet by the end of this year. Some legal experts, however, caution that because the proposed rules would regulate online communications more severely than offline advertisements, the courts would toss the regulations out as unacceptable.

Not all fun and games
The Greek government has banned all electronic games across the country, including those that run on home computers, on Game Boy-style portable consoles and on mobile phones. Thousands of tourists in Greece are unknowingly facing heavy fines or long terms in prison for owning mobile phones or portable video games.

The law, enacted at the end of July, explicitly forbids electronic games with "electronic mechanisms and software" from public and private places, and people have already been fined tens of thousands of dollars for playing or owning games. The Greek gaming community has reacted with a mixture of shock, disbelief and anger. One Web site, www.gameland.gr, has started a news service about the ban and opened a petition to protest it.

In another crackdown of sorts, Microsoft may use its Xbox Live online gaming service to target "mod chips"--chips that modify the Xbox console so it can run copied game discs and unlicensed software. The user agreement and privacy notice included with the first Xbox Live kits sent to beta testers specify that Microsoft reserves the right to revoke Xbox Live privileges for anyone with a hacked Xbox and to scan consoles on the network to enforce its rights.

Microsoft has said it will take legal action against those who make modifications that infringe on its intellectual property. A company representative did not provide details on how the license provisions might be applied, saying only, "The language in the Xbox Live user agreement leaves the door open in order for us to protect the security of our platform."

Sometimes the rules of the game change. The last of the major free fantasy football sites has instituted an 11th-hour plan to charge certain users, a move some team owners are calling a fumble. Sandbox.com, which touts "FREE" Fantasy Football on its site, has begun charging a $3.95 per month fee to use the site during "peak" hours.

The company's plans to charge aren't clearly stated on the site. And before assembling their fantasy teams--which are made up of real NFL players--potential owners must click several buttons promising "free" services. It's only when they go back to make changes to their roster that they're notified of the peak-hours charges.

Security flaws
A flaw in its Windows operating system could allow hackers to gain unauthorized access to thousands of computers. Microsoft said the "critical" flaw affects how more than a dozen Microsoft products, including programs for Windows and the Macintosh, handle digital certificates, which are used to certify the authenticity of a Web site or of software code.

The flaw could let a Web site with a valid certificate issue a second, invalid one, which could enable unauthorized access to a computer as well as, among other things, the theft of user passwords or credit card numbers. Experts were quick to point out that, so far, it is unlikely anyone has taken advantage of the flaw, but they also say that the implications of the flaw could be widespread, since it affects one of Windows' key security-authentication mechanisms.

Microsoft also released further details of a rash of attacks on Windows 2000 servers that has so far stumped the software giant's research team. It warned that several companies had recently observed an "increased level of hacking activity." Microsoft Product Support Services (PSS) told system administrators to be on the lookout for Trojan horses--programs that appear to be legitimate but aren't--and for several specific kinds of odd network behavior.

A minor variant of the Klez virus was expected to go into action Friday, erasing a host of files on infected hard drives. But the attack may also wipe out the attacker. The mass-mailing computer virus called Klez.E triggers its payload on the sixth day of March, May, September and November, erasing 14 different types of files, including Word documents and HTML files.

Also of note
Microsoft introduced its long-awaited digital media software, Windows Media Player 9 Series, in an effort to establish dominance for its operating system in distributing high-quality digital content...Reversing course, handheld maker Palm said it would offer refunds to customers who bought its m130 device and are upset that it does not display as many colors as the company advertised it would...Microsoft and Hewlett-Packard released additional details about digital entertainment PCs coming for the holidays, but new anti-copying technology could hamper sales...Airline ticketing giant Sabre Holdings has launched automated travel-information software for airlines and other companies looking to replace their human operators...AT&T Wireless began offering a new subscription plan that lets customers place unlimited domestic calls anytime they want for a flat rate.

 

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