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June 23, 2005

Peer-To-Peer File Sharing Comes With Risks, Says FTC



Courtesy of InformationWeek

Peer-to-peer file-sharing technology offers both benefits and risks, according to a report issued today by the Federal Trade Commission.

The report, based on comments from the FTC's P2P workshop last December, cites benefits such as fast file transfers, bandwidth conservation, and reduced storage needs. It also warns of risks related to data security, spyware and adware, viruses, copyright infringement, and pornography.

How significant are those risks compared with general Internet use? The FTC doesn't know. "Workshop participants submitted little empirical evidence concerning whether the risks arising from P2P file sharing are greater than, equal to, or less than these risks from other Internet-related activities," the report finds.

The report comes at an odd time. The Supreme Court is expected to soon decide the future of peer-to-peer technology when it rules in the case of Metro-Goldwyn Mayer Studios v. Grokster Ltd. As the FTC says, "Because [this case] likely will clarify the legal framework applicable to P2P file sharing and may have a profound effect on the future structure and impact of P2P file-sharing programs, FTC staff does not believe that it would be prudent at this time to make specific recommendations regarding the intellectual-property issues raised by P2P file sharing."

Of course, intellectual-property issues are at the crux of P2P file sharing. Unwilling to confront either the entertainment industry's frothy contempt for P2P technology or consumers' disregard for copyright laws, the best the FTC can manage is to encourage P2P software makers to more fully disclose the evidently unmeasured risks that may be associated with the use of their products.

The FTC urges policymakers to "balance the protection of intellectual property and the freedom to advance new technologies, thereby encouraging the creation of new artistic works as well as economic growth and enhanced business efficiency." That's easier said than done.

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