Ouch! German Court Slams Rapidshare With $34 Million Fine (Updated)

The Regional Court in Hamburg, Germany, has fined file-hosting service Rapidshare a hefty €24 million ($34 million) and has ruled that the company must start proactively filtering certain content. The case was brought on by copyright protection association GEMA, which claims it represent over 65,000 composers, authors and music publishers across the globe.

Update: looks like we jumped the gun on this one. The cited amount of €24 million is actually the value of the subject matter of this injunction verdict as determined by court, not the actual fine (although it could become that much).

Following a request made by the organization, the Hamburg court ruled that Rapidshare is forbidden from making any of 5,000 music tracks from GEMA’s collection available on the Internet. To comply, the company needs to make sure all of those tracks are removed from its servers and also ensure that they are not uploaded again by users. How the company is expected to do the latter, especially since many users upload files in ZIP format and password-protect them, is a mystery to me.

Rapidshare is wildly popular, with an Alexa rank of 14 and millions of unique visitors per month (Compete).

Late April, Ars Technica reported that the company had begun handing over user information to record labels looking to pursue illegal file-sharers. It’s also not the first time Rapidshare finds itself in court because of GEMA’s persistent attacks: it had already lost a similar case back in January 2008.

For this case, Rapidshare will appeal to higher courts and most likely restrict the scope of the decisions made by the Regional Court in Hamburg. Rapishare COO Bobby Chang, according to TorrentFreak, said “it would make more sense to offer music fans the right products and services at the right price to open up a new source of income for music-markets on the Internet.”

Hear, hear.