WASHINGTON (Reuters) - U.S. state prosecutors are preparing to warn Internet file-swapping networks that they could be guilty of deceptive business practices, according to a draft letter obtained by Reuters.
"Peer to peer" networks, such as Kazaa and Morpheus, should warn users they face computer viruses, copyright-infringement suits and other risks when they log on to search for music, movies and other files, the letter said.
"A failure to prominently and adequately warn consumers ... could constitute, at the very least, a deceptive trade practice," said the letter, which was subtitled "California Attorney General Bill Lockyer Edited Version 2/25/04."
The letter could open up another front in the long-running battle between file-trading networks and the entertainment industry, which says its sales are being hurt by the massive, unauthorized copying of its songs and movies.
Lockyer intends to pick up signatures from other state attorneys general at a national meeting this week, according to a technology group that obtained a copy of the letter.
"There's no letter to comment on," said Lockyer spokesman Tom Dresslar, who added that the attorney general had shared his concerns about file-sharing with other state prosecutors.
"These are substantial, serious issues that need to be addressed," Dresslar said. "He's working with his colleagues in other states to figure out how we may want to address the issues."
A lobbyist with the Motion Picture Association of America confirmed that Lockyer's office had crafted the letter with the trade group's help.
"They sought our input. We didn't write the letter," said Vans Stevenson, senior vice president for state legislative affairs at the MPAA.
Up to 5 million users were logged on to peer-to-peer networks at once in December 2003, a 26 percent increase from the same period a year ago, according to research group BigChampagne.
Government prosecutors so far have largely stayed on the sidelines as entertainment industry groups have sued the Web networks and individual users for copyright infringement.
But that could change if peer-to-peer networks do not take steps to prevent children from accessing pornography when they search for free movies and music, the letter said.
Networks also should notify users they risk becoming victims of identity theft if they do not configure their computers properly, it said.
"Over the coming months, we will begin focusing more attention on the risks P2P software programs pose to consumers in our states," it said.
The head of a peer-to-peer trade group said such risks could be found all across the Internet and easily accessed through Web browsers, instant messaging and other software.
"The category of products that the attorney generals are concerned about here ... would be software products that enable Internet connectivity," said Adam Eisgrau, whose trade group P2P United represents the file-sharing networks Morpheus, Grokster, BearShare, Blubster and eDonkey.
In a letter to Lockyer, Eisgrau said the warning-label requirement would constitute "an extraordinary expansion of product liability law" because it would require producers to warn customers about the consequences of any misuse of their product.
A spokesman for the Recording Industry Association of America (news - web sites) declined to comment on the letter.