Company to Pay Fine for Worker Song Swapping

The recording industry announced it had collected $1 million from a company that let employees swap songs on an internal computer server.

Arizona-based Integrated Information Systems Inc., which ran a dedicated server permitting employees to access and distribute thousands of music files over their company computer network, agreed to pay the Recording Industry Assn. of America $1 million rather than go to trial.

The trade group, which represents major music companies such as AOL Time Warner Inc.’s Warner Music, Bertelsmann’s BMG, Sony Corp.’s Sony Music, Vivendi Universal and EMI Group, has been on a legal crusade to stamp out online copyright infringement since successfully hobbling Napster, the original song-swapping service, with a preliminary injunction last year.

“This sends a clear message that there are consequences if companies allow their resources to further copyright infringement,” said Matt Oppenheim, RIAA vice president, business and legal affairs.

The RIAA became aware in mid-2001 of an IIS company server dedicated solely to allowing employees to post and share thousands of copyrighted MP3 files, which are digitally compressed music files.

The RIAA also said it reached a $3.2-million settlement from CD manufacturing company DOCdata USA to resolve claims the company had pressed dozens of infringing CDs, including albums by Santana, Toni Braxton and Destiny’s Child.