FTC drops P2P file sharing probe of LimeWire

Computerworld - In a rare break for LimeWire, the Federal Trade Commission (FTC) last week decided to drop its investigation into the embattled software company's controversial Peer-to-Peer file sharing software.

In a letter addressed to LimeWire CEO George Searle, FTC associate director Mary Engle said the agency found that the LimeWire software includes safeguards aimed at preventing inadvertent file sharing among users of its software.

In the letter, Engle also cited a high attrition rate among users of legacy versions of LimeWire's software, along with the fact that the company cannot force users to upgrade to new versions of the P2P tools.

Under FTC rules, an act or practice is not considered unfair unless it causes reasonably unavoidable injury to consumers, Engle noted.

The letter did stress that the agency continues to be concerned about inadvertent data leaks on P2P networks, arguing that consumers shouldn't have to worry that small software configuration errors could expose confidential data to millions of P2P network users.

The FTC called on LimeWire and other vendors to act "responsibly" by providing strong safeguards for its users.

The decision surely comes as welcome news to LimeWire, which has faced increasing legal scrutiny in recent years. For example, the Recording Industry Association of America (RIAA) has long accused the company of enabling massive music piracy, and earlier this year asked a federal court in New York to shutter the vendor and freeze all its assets.

In June eight music publishers including EMI Music Publishing and Sony/ATV Music Publishing joined the RIAA and filed a related case accusing LimeWire of enabling "pervasive online infringement" of copyrighted music.

A month earlier, New York federal Judge Kimba Wood had found that LimeWire and its CEO, Mark Gorton, are liable for inducing and enabling massive copyright infringement with its software.

LimeWire has also come under scrutiny from federal lawmakers after the leaking of several sensitive government documents, including one detailing presidential motorcade routes and safe house locations, on P2P networks using its software.

LimeWire executives have repeatedly downplayed such concerns, arguing that upgrades have significantly boosted the security of its software.

"The factors noted by the FTC in voluntarily closing the investigation speak for themselves," a LimeWire spokeswoman said today. "We have incorporated many safeguards and have taken active steps to educate users of current and older software versions to avoid disclosure of sensitive information."

It's unclear how the decision will influence the company's ongoing court cases.

LimeWire has also been trying to hammer out a last-minute settlement with the music labels, along with plans to launch a subscription-based music service for consumers later this year.

Jaikumar Vijayan covers data security and privacy issues, financial services security and e-voting for Computerworld. Follow Jaikumar on Twitter at @jaivijayan, or subscribe to Jaikumar's RSS feed . His e-mail address is jvijayan@computerworld.com.

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