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3.2.7 / November 26, 2006
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Kazaa Media Desktop (once stylized as "KaZaA", but now usually written "Kazaa") started as a peer-to-peer file sharing application using the FastTrack protocol licensed by Joltid Ltd. and operated as Kazaa by Sharman Networks. Kazaa was subsequently under license as a legal music subscription service by Atrinsic, Inc. As of August 2012, the Kazaa website is no longer active. According to one of its creators, Jaan Tallinn, Kazaa is pronounced ka-ZAH.
Kazaa Media Desktop was commonly used to exchange MP3 music files and other file types, such as videos, applications, and documents over the Internet. The Kazaa Media Desktop client could be downloaded free of charge; however, it was bundled with adware and for a period there were "No spyware" warnings found on Kazaa's website. During the years of Kazaa's operation, Sharman Networks and its business partners and associates were the target of copyright-related lawsuits, related to the copyright of content distributed via Kazaa Media Desktop on the FastTrack protocol.
Kazaa and FastTrack were originally created and developed by Estonian programmers from BlueMoon Interactive including Jaan Tallinn and sold to Swede Niklas Zennström and Janus Friis (who were later to create Skype and later still Joost and Rdio). Kazaa was introduced by the Dutch company Consumer Empowerment in March 2001, near the end of the first generation of P2P networks typified by the shutdown of Napster in July 2001.
Initially, some users of the Kazaa network were users of the Morpheus client program, formerly made available by MusicCity. Eventually, the official Kazaa client became more widespread. In February 2002, when Morpheus developers failed to pay license fees, Kazaa developers used an automatic update ability to shut out Morpheus clients by changing the protocol. Morpheus later became a client of the gnutella network.
Consumer Empowerment was sued in the Netherlands in 2001 by the Dutch music publishing body, Buma/Stemra. The court ordered Kazaa's owners to take steps to prevent its users from violating copyrights or else pay a heavy fine. In October 2001 a lawsuit was filed against Consumer Empowerment by members of the music and motion picture industry in the USA. In response Consumer Empowerment sold the Kazaa application to Sharman Networks, headquartered in Australia and incorporated in Vanuatu. In late March 2002, a Dutch court of appeal reversed an earlier judgment and stated that Kazaa was not responsible for the actions of its users. Buma/Stemra lost its appeal before the Dutch Supreme Court in December 2003.
In 2003, Kazaa signed a deal with Altnet and Streamwaves to try to convert users to paying, legal customers. Searchers on Kazaa were offered a free 30-second sample of songs for which they were searching and directed to sign up for the full-featured Streamwaves service.
However, Kazaa's new owner, Sharman, was sued in Los Angeles by the major record labels and motion pictures studios and a class of music publishers. The other defendants in that case (Grokster and MusicCity, makers of the Morpheus file-sharing software) initially prevailed against the plaintiffs on summary judgment (Sharman joined the case too late to take advantage of that ruling). The summary judgment ruling was upheld by the Ninth Circuit Court of Appeals, but was unanimously reversed by the US Supreme Court in a decision titled MGM Studios, Inc. v. Grokster, Ltd.
Following that ruling in favor of the plaintiff labels and studios, Grokster almost immediately settled the case. Shortly thereafter, on 27 July 2006, it was announced that Sharman had also settled with the record industry and motion picture studios. As part of that settlement, the company agreed to pay $100 million in damages to the four major music companies—Universal Music, Sony BMG, EMI and Warner Music—and an undisclosed amount to the studios. Sharman also agreed to convert Kazaa into a legal music download service. Like the creators of similar products, Kazaa's owners have been taken to court by music publishing bodies to restrict its use in the sharing of copyrighted material.
While the U.S. action was still pending, the record industry commenced proceedings against Sharman on its home turf. In February 2004, the Australian Record Industry Association (ARIA) announced its own legal action against Kazaa, alleging massive copyright breaches. The trial began on 29 November 2004. On 6 February 2005, the homes of two Sharman Networks executives and the offices of Sharman Networks in Australia were raided under a court order by ARIA to gather evidence for the trial.
On 5 September 2005, the Federal Court of Australia issued a landmark ruling that Sharman, though not itself guilty of copyright infringement, had "authorized" Kazaa users illegally to swap copyrighted songs. The court ruled six defendants—including Kazaa's owners Sharman Networks, Sharman's Sydney-based boss Nikki Hemming and associate Kevin Bermeister—had knowingly allowed Kazaa users illegally to swap copyrighted songs. The company was ordered to modify the software within two months (a ruling enforceable only in Australia). Sharman and the other five parties faced paying millions of dollars in damages to the record labels that instigated the legal action.
On 5 December 2005, the Federal Court of Australia ceased downloads of Kazaa in Australia after Sharman Networks failed to modify their software by the December 5 deadline. Users with an Australian IP address were greeted with the message "Important Notice: The download of the Kazaa Media Desktop by users in Australia is not permitted" when visiting the Kazaa website. Sharman planned to appeal against the Australian decision, but ultimately settled the case as part of its global settlement with the record labels and studios in the United States.
Thomas-Rasset appealed the verdict and was given a new trial. In June 2009 that jury awarded the recording industry plaintiffs a judgment of $80,000 per song, or $1.92 million. This is less than half of the $150,000 amount authorized by statute.
The federal court found the award "monstrous and shocking" and reduced it to $54,000. The recording industry offered to accept a settlement of $25,000, with the money going to charities that support musicians. Apparently undaunted, Thomas-Rasset was able to obtain a third trial on the issue of damages. In November 2010 she was again ordered to pay for her violation, this time $62,500 per song, for a total of $1.5 million. At last word, her attorneys were examining a challenge to the constitutional validity of massive statutory damages, where actual damages would have been $24.
- Cydoor (spyware): Collects information on the PC's surfing habits and passes it on to Cydoor Desktop Media.
- B3D (adware): An add-on which causes advertising popups if the PC accesses a website which triggers the B3D code.
- Altnet (adware): A distribution network for paid "gold" files.
- The Best Offers (adware): Tracks your browsing habits and internet usage to display advertisements similar to your interests.
- InstaFinder (hijacker): Redirects your URL typing errors to InstaFinder's web page instead of the standard search page.
- TopSearch (adware): Displays paid songs and media related to your search in Kazaa.
- RX Toolbar (spyware): The toolbar monitors all the sites you visit with Microsoft Internet Explorer and provides links to competitors' websites.
- New.net (hijacker): A browser plugin that lets you access several of its own unofficial Top Level Domain names, e.g., .chat and .shop. The main purpose of which is to sell domain names such as www.record.shop which is actually www.record.shop.new.net.
Kazaa's legal issues ended after a settlement of $100 million in reparations to the recording industry. Kazaa, including the domain name, was then sold off to Brilliant Digital Entertainment, Inc. Kazaa then operated as a monthly music subscription service allowing users to download unlimited songs, before finally ending the service.
Some users still use the old network on the unauthorized versions of Kazaa, either Kazaa Lite or Kazaa Resurrection, which is still a self-sustaining network where thousands of users still share unrestricted media. This fact was previously stated by Kazaa when they claimed their FastTrack network was not centralized (like the old Napster), but instead a link between millions of computers around the world.
However, in the wake of the bad publicity and lawsuits, the number of users on Kazaa Lite has dropped dramatically. They have gone from several millions of users at a given time to mere thousands.
Without further recourse, and until the lawsuit was settled, the RIAA actively sued thousands of people and college campuses across the U.S. for sharing copyrighted music over the network. Although the lawsuits were mainly in the U.S., other countries also began to follow suit. Beginning in 2008, however, RIAA announced an end to individual lawsuits. 
Since 2012, Kazaa's website is inactive and displaying "We thank you for your interest in Kazaa. However we no longer offer a music service."
- This section is limited to those programs which are based on the official Kazaa Media Desktop client. For other FastTrack-compatible clients, see FastTrack.
Kazaa Lite was an unauthorized modification of the Kazaa Media Desktop application which excluded adware and spyware and provided slightly extended functionality. It became available in April 2002. It was available free of charge, and as of mid-2005 was almost as widely used as the official Kazaa client itself. It connected to the same FastTrack network and thus allowed to exchange files with all Kazaa users, and was created by third party programmers by modifying the binary of the original Kazaa application. Later versions of Kazaa Lite included K++, a memory patcher that removed search limit restrictions, and set one's "participation level" to the maximum of 1000. Sharman Networks considers Kazaa Lite to be a copyright violation.
After development of Kazaa Lite stopped, K-Lite v2.6, Kazaa Lite Resurrection and Kazaa Lite Tools appeared. Unlike Kazaa Lite, which is a modification of an old version of Kazaa, K-Lite v2.6 and later require the corresponding original KMD executable to run. K-Lite doesn't include any code by Sharman: instead, it runs the user's original Kazaa Media Desktop executable in an environment which removes the malware, spyware and adware and adds features. In November 2004, the developers of K-Lite released K-Lite v2.7, which similarly requires the KMD 2.7 executable.
Other clean variants used an older core (2.02) and thus, K-Lite had some features that others didn't have. K-Lite included multiple search tabs, a custom toolbar, and autostart, a download accelerator, an optional splash screen, preview with option (to view files you are currently downloading), an IP blocker, Magnet links support, and ad blocking, although the clients based on the 2.02 core abstract these functions to third-party programs.
Kazaa Lite Tools was an update of the original Kazaa Lite, with modifications to the third-party programs included, it is newer and includes more tools.
Kazaa Lite Resurrection (KLR) appeared almost immediately after Kazaa Lite development was stopped in August 2003. KLR was a copy of Kazaa Lite 2.3.3.
In popular culture
- "I'm Jaan Tallinn, co-founder of Skype, Kazaa, CSER and MetaMed. AMA. • r/IAmA". reddit.
- "Bluemoon Interactive". Bluemoon.ee. Retrieved 2010-01-21.
- Healey, Jon (2003-06-24). "Streamwaves Aims to Get Kazaa Users to Pay". Los Angeles Times. Retrieved 2009-06-02.
- MGM Studios, Inc. v. Grokster, Ltd. at Wikisource
- "Slyck News - Supreme Court Rules Against P2P Companies!". www.slyck.com.
- "Kazaa to Pay $100 Million to Record Labels". Daily Tech. 27 July 2006. Retrieved 2010-05-05.
- "Kazaa site becomes legal service". BBC News. 2006-07-27. Retrieved 2010-01-21.
- Universal Music Australia Pty Ltd v Sharman License Holdings Ltd  FCA 1242 AustLII
- "Universal Music Australia Pty Ltd v Sharman License Holdings Ltd  FCA 1242". Federal Court of Australia. 5 September 2005. Retrieved 2010-01-21.
- Ferguson, Iain (December 5, 2005). "Sharman cuts off Kazaa downloads in Australia". CNET News. Archived from the original on July 14, 2014.
- Freed, Joshua (October 5, 2007), "Woman to pay downloading award herself", USA Today, retrieved 21 January 2010
- Karnowski, Steve (June 19, 2009). "Facing the music: $1.9M file-share verdict stuns Minn. mom". USA Today. Retrieved 25 February 2011.
- Title 17 USC § 504 Statutory Damages
- Forliti, Amy (November 4, 2010). "Atty: MN woman can't pay for sharing songs". The Boston Globe. Retrieved 25 February 2011.
- Naraine, Ryan (March 21, 2006). "Spyware Trail Leads to Kazaa, Big Advertisers". eWeek.com.
- "RIAA v. The People: Five Years Later". Electronic Frontier Foundation. Retrieved 1 November 2016.
- "Piracy and illegal file-sharing: UK and US legal and commercial responses". Practical Law. Retrieved 1 November 2016.
- Anderson, Nate. "No more lawsuits: ISPs to work with RIAA, cut off P2P users". Ars Technica. Retrieved 1 November 2016.
- "Malware prevalence in the KaZaA file-sharing network". Seungwon Shin, Jaeyeon Jung, and Hari Balakrishnan. 2006.