Supreme Court says internet service provider isn’t liable for bootlegged music downloads

By John Fritze, CNN

(CNN) — In a major loss for the nation’s music industry, the Supreme Court on Wednesday ruled that a major internet service provider is not liable for copyright infringement because it failed to kick known copyright violators off its network.

Justice Clarence Thomas wrote the opinion for a unanimous court.

The nation’s largest record labels want to hold internet providers liable for copyright infringement because they declined to cut off online access to users they know are downloading bootlegged music.

The music companies hold the rights to many of America’s most recognizable singers and songwriters, including Bob Dylan, Bruce Springsteen, Beyoncé, Eminem, Eric Clapton and Gloria Estefan.

“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,” Thomas wrote.

A jury initially awarded Sony Music Entertainment and other record companies a $1 billion verdict against Cox Communications for the infringement of more than 10,000 copyrighted works. While a federal appeals court nixed that award, it nevertheless held that Cox could be held indirectly liable for contributing to infringement on a massive scale.

Cox had warned of cataclysmic consequences for internet users if Sony got its way. For one thing, it said, institutional customers like universities and hospitals could be entirely cut off from the internet if only a few users on their campuses were downloading pirated music. At oral arguments in early December, that position seemed to resonate with both conservative and liberal justices.

Sony, Universal Music Corp. and other companies representing 80% of the music industry sued in 2018. A jury in Virginia found that Cox was liable for both vicarious infringement — meaning it benefited financially from it — and contributory infringement. The Richmond-based 4th US Circuit Court of Appeals reversed part of that decision, on vicarious liability, and required the district court to reconsider the $1 billion verdict.

But the appeals court upheld the contributory infringement decision, noting that the music industry had flooded Cox with infringement notices from 2013 to 2014 and that the company only terminated 32 customers for copyright infringement. It had, at the same time, terminated hundreds of thousands of subscribers for nonpayment. The appeals court ordered a new trial to reassess the size of the award.

“The evidence at trial, viewed in the light most favorable to Sony, showed more than mere failure to prevent infringement,” the appeals court wrote. “The jury saw evidence that Cox knew of specific instances of repeat copyright infringement occurring on its network, that Cox traced those instances to specific users, and that Cox chose to continue providing monthly internet access to those users despite believing the online infringement would continue because it wanted to avoid losing revenue.”

Latest ruling declining to hold companies liable

The Supreme Court has declined to hold companies liable for aiding and abetting in other recent civil damages cases.

Last year, a unanimous court ruled that American gun manufacturers could not be held responsible for cartel violence on the Southwest border, even though their guns are often involved in those crimes.

In 2023, the court unanimously ruled that Twitter, now X, could not be held liable for aiding and abetting terror attacks just because it had hosted tweets on its platform that were created by the terror group ISIS. Both cases played a central role in the copyright dispute between Cox and Sony.

The case had drawn attention from some of the nation’s most recognized internet companies, including Google and X, which sided with the internet service providers. X argued in a brief that the appeals court ruling against Cox could “wreak havoc” on the tech industry and specifically on artificial intelligence.

X argued that if content creators are permitted to sue AI platforms when people use their technology to violate copyright law, the tech companies would “have no choice but to constrain their actions” to avoid the potential liability.

Several media companies, including Warner Bros. Discovery, have sued AI platforms alleging copyright infringement. Warner Bros. Discovery is the parent company of CNN.

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