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Wednesday, December 18, 2002
RIAA launches new campaign targeting piracy at retail outlets

Faced with the growing ease and prevalence of CD piracy, the Recording Industry Association of America (RIAA) is today launching a new legal enforcement initiative that targets music piracy at retail outlets across the country.

The new anti-piracy campaign comes as evidence is increasingly showing that the sale of illegal sound recordings is expanding beyond its traditional base and now infiltrating small, established businesses nationwide. RIAA investigators have uncovered a host of retail outlets, including gas stations, convenience stores, grocery markets and some small music stores that are trying to make a quick buck by selling pirated music on the side.

The illegal manufacture and distribution of pirated music has become considerably easier in recent years due to computer technology developments and the low cost of replication materials and equipment. Commercial piracy, which used to require large and costly facilities, can now be done cheaply and on a smaller scale. Some retailers are now attempting to cash in on this phenomenon by reselling illegal CDs and tapes or, in some cases, even manufacturing illegal products themselves.

In a new effort to counter this trend, the RIAA has recently surveyed hundreds of stores across the country, making undercover purchases from those selling illegal, pirated music. On Friday, the RIAA sent legal demands to 78 retail outlets identified by the survey, and gave them the choice between cash settlements or litigation. The initial phase of this retail program will target music piracy at retail outlets in Chicago, Los Angeles, New York City and parts of Texas and Florida, but the program is expanding to all areas of the country.

Pointing to the sizable increase in seizures of pirate CD-Rs as prime evidence of the problem, Hilary Rosen, Chairman and CEO of the RIAA said that, "This new initiative should serve as a clarion call for retail outlets of all shapes and sizes that we take music piracy seriously and they need to get their house in order. No one should think they operate below the radar anymore."

"It's increasingly clear that to continue to make inroads," Rosen added, "we need to choke off physical goods piracy not only at the major manufacturing level but also at various points on the distribution chain."

"Piracy like this hurts everyone in the food chain, including the vast majority of record retailers who operate legally, and who shouldn't have to compete with retailers who operate illegally," said Pam Horovitz, President of the National Association of Recording Merchandisers. "Retailers who ignore the RIAA's warnings should know that they also stand to lose their membership in NARM as piracy is not tolerated in our association."

Targeted retailers will receive a letter specifying the legal claims against them and the exposure they face, a draft complaint, a sample of the product purchased at the location, a settlement agreement and an inventory sheet for surrendering the pirate product. The agreement will require that the retail outlet stop all illegal activity, pay a settlement fee and provide "intelligence" on other pirate music offerings. If a settlement is not agreed to promptly, the retailer will be sued. Retailers face significant liability under copyright laws, including up to $150,000 for each individual work pirated.

"We have worked well with many retail outlets to curb piracy by offering education and training programs," Rosen said. "But some retailers, including several of those we have targeted here, have ignored our efforts."

This first wave of legal notices are just the first phase of this effort. In the coming weeks and months, many more notices will be sent to retail outlets across the country. The public is encouraged to call the RIAA's "BADBEAT" hotline line (1-800-BADBEAT) with any leads on retail outlets selling illegal product.

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