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Let me touch on a few things here...
The privacy patch stops others from being able to browse your entire shared list, nothing else. If the RIAA downloads a copyrighted song from you, then they will prosecute.
Over 126 countries have signed international treaties which make copyright violations illegal. This means you are at risk if you trade files in virtually any country. There are a few exceptions to this rule, but they are rare.
Finally, my definition of stealing doesn't matter, its the laws which are on the books that matter. In this case, stealing or distributing copyrighted material (intellectual property) is illegal. The courts can only follow the laws that are written. B)
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It is abit of a grey area but i know in my country (u.k) it isnt classed as theft only breaking copy right laws which are country dont seem too botherd about on less your selling the stuff!