Peer-to-peerwebsite Grokster, long a thorn in the side of Hollywood's anti-piracy chiefs,has announced it is closing down.
The move followsJune's Supreme Court ruling that individuals or companies that activelyencourage copyright infringement by users of their service can be heldresponsible for their users' conduct.
Grokster hasagreed that the court enter a judgment for $50m and said it will relaunch as alegitimate business.
"The SupremeCourt in its ruling sent a strong and clear message that businesses based ontheft should not and will not be allowed to flourish," MPAA chief Dan Glickmansaid.
"The clarity ofthe Court's decision combined with this settlement provides the content andtechnology sectors a window of opportunity which I think ultimately willgreatly benefit consumers.
"I look forwardto working with the tech community to deliver our movies to audiences inexciting new ways that both respect copyright law while meeting consumerdemands for hassle-free, high-quality ways to watch movies."
In a statement from its West Indies HQ, a Grokster spokesman admitted: "It is time for a new beginning."
The Grokster decision to settle looks like bad news for other file-sharing companies, including the owners of Morpheus, and Kazaa, who have used the defence that the technology should not be blamed for the action of customers.
File-Sharing Sites' New Tune - Business Week
Grokster to shut file-sharing business - Reuters
Q&A: Movie downloading - BBC
Grokster Surrenders to Labels - LA Times
Grokster Shuts P2P Operations - Red Herring