In the continuing legal fallout among underworld peer-to-peer music services, popular file-sharing site WinMX.com ceased operating and the New York office of eDonkey.com appeared to be closed, industr


(Reuters) -- In the continuing legal fallout among underworld peer-to-peer music services, popular file-sharing site WinMX.com ceased operating and the New York office of eDonkey.com appeared to be closed, industry sources and users said Sept. 21.

The turmoil among file-sharing networks follows the landmark ruling by the U.S. Supreme Court in June that held anyone who induces copyright infringement is liable for the resulting acts of infringement by others.

The Recording Industry Assn. of America sent out "cease-and-desist" letters to seven file-sharing groups during the week of Sept. 12. A spokeswoman for the RIAA declined to name the targets. But BearShare, eDonkey and WinMX were reportedly among the targets.

"There's certainly a a big realignment of networks going on after the RIAA letters. Everyone is going to see a fallout since the ruling is making it tough for these companies to exist," said Marc Morgenstern, VP for Loudeye, during the Digital Hollywood conference in Santa Monica, Calif.

An eDonkey executive with a Boston phone number was not immediately available to comment. Industry sources said the phone in the New York office had been disconnected.

A spokesman for Frontcode Technologies, developers of the WinMX application, could not be located to comment.

Users in both Europe and North America complained that the WinMX site was unavailable throughout the day Sept. 21. Free Peers Inc., backers of BearShare, did not respond to attempts to contact them via e-mail.

The latest developments come on the heels of a pending deal in which file-sharing service Grokster is set to be acquired by Mashboxx, a new company formed with the intent of establishing a legal peer-to-peer music company, sources familiar with the matter said.

A spokesman for Mashboxx, formed by former Grokster President Wayne Rosso and other partners, declined comment.

Michael Page, a lawyer for Grokster, also declined to comment.

The Rosso spokesman declined to comment on the talks with Grokster but said he expects the Mashboxx service to launch in the next few months.

The sources familiar with the matter said the pending deal with Mashboxx helped pave the way for settlement discussions between Grokster and the major record labels.


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