The U.S. Supreme Court on Wednesday (March 25) rejected a billion-dollar music piracy lawsuit filed by the major labels against telecom giant Cox Communications, ruling that the internet service provider cannot be held responsible for infringement by its users.
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In a decision against Universal Music Group, Sony Music Entertainment and Warner Music, the justices unanimously overturned an earlier ruling that held Cox liable for thousands of songs illegally shared by its users — a decision that led a staggering $1 billion infringement verdict in 2019.
“Countless people use the Internet for legal activities, but some use it to illegally share copyrighted works, such as songs and movies,” Justice Clarence Thomas wrote for the court. “Under our precedents, a company is not liable as a copyright infringer for merely providing a service to the general public with knowledge that it will be used by some to infringe copyrights.”
In a statement, Cox said the ruling was a “decisive victory” for internet providers and their users: “This opinion affirms that Internet service providers are not copyright police and should not be held liable for the actions of their customers — and after years of battling in the trial and appellate courts, we have definitively shut down the music industry’s aspirations of mass evictions from the internet.
A representative for the music companies did not immediately return a request for comment.
UMG, Sony and WMG teamed up to sue Cox in 2018, claiming the internet provider itself was legally responsible for enabling the digital sins of its users. The labels claimed Cox had received hundreds of thousands of notices about piracy, but had never permanently terminated a single subscriber accused of stealing music.
In December 2019, a jury issued a verdict holding Cox liable for helping users infringe more than 10,000 songs, awarding the labels more than $99,000 per song — adding up to a whopping $1 billion fine. An appeals court later ordered that fine re-calculated, but Cox was still facing hundreds of millions in potential damages if the case had moved ahead.
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With the battle before the Supreme Court, Cox argued that labels’ case “jeopardizes internet access for millions of users” by forcing ISPs to terminate users rather than risk billions in legal damages. The labels argued such fears were overblown and designed to distract from the facts of the case: “Cox made a deliberate and egregious decision to elevate its own profits over compliance with the law,” the claimed.
But in Wednesday’s ruling, the justices sided with Cox — ruling that an ISP can only be held responsible “if it intended that the provided service be used for infringement” and not merely if it was aware of certain bad actors.
“Cox did not tailor its service to make copyright infringement easier,” Thomas wrote, noting that the ISP had repeatedly sent warnings and suspended accounts accused of filesharing. “Cox simply provided Internet access, which is used for many purposes other than copyright infringement.”
Thomas repeatedly cited landmark rulings that have shaped the modern entertainment ecosystem, including the 1984 decision that legalized VCRs and the 2005 decision that shut down peer-to-peer file sharing services Grokster and Morpheus. Those rulings make clear, the justice said, that “mere
knowledge” that a product or service will be used illegally is not enough to sue its creator.
While the high court’s ruling for Cox was unanimous, its legal rationale was not. Justice Sonia Sotomayoy, joined by Ketanji Brown Jackson, issued her own opinion — saying they would still side with Cox but that Thomas’ legal holding would “eviscerate” the longstanding status quo on how ISPs handle illegal conduct by their users.
“The majority’s decision thus permits ISPs to sell an internet connection to every single infringer who wants one without fear of liability and without lifting a finger to prevent infringement,” Sotomayor wrote. “It also means that Cox is free to abandon its current policy of responding to copyright infringement.”
Go read the Supreme Court’s entire decision here.