The Supreme Court handed movie studios and record labels a sweeping victory against file-swapping, ruling Monday that peer-to-peer companies such as Grokster could be held responsible for the copyright piracy on their networks.

In a unanimous decision, the justices ruled companies that build businesses with the active intent of encouraging copyright infringement should be held liable for their customers' illegal actions.

The decision comes as a surprisingly strong victory for copyright companies and stands to reshape an Internet landscape in which the presence of widespread file swapping has become commonplace.

With the potential to rewrite the Supreme Court's 1984 Sony Betamax ruling that made VCRs--and by extension any technology with "substantial noninfringing use"--legal to sell, the decision has been closely watched across Silicon Valley.

Hollywood studios and record labels had argued that allowing file-swapping networks to continue with a free pass on copyright issues would undermine any business-producing copyrighted works and, by extension, a large portion of the U.S. economy.

"The most important message from today's historic decision is that progress and innovation do not have to come at the expense of recording artists, songwriters and the people who make their living in the entertainment industry," Warner Music Group CEO Edgar Bronfman said in a statement. "This important decision will allow artists and the creative community to prosper side by side with the technology industry."

A report in today's Independent on Sunday claims that the UK government will attempt to subsidise its controversial plan to make us all carry identity cards by selling our data for £750 a throw.

According to the newspaper, government ministers have already entered discussions with private firms to flog our data in a bid to defray some of the billions the madcap scheme will cost.

Representatives of the UK government recently said that one of the major purposes of the ID card plan was to protect us all from identity theft. Naturally that pre-supposes that we have an identity to steal, rather unlikely if our data is being sold to grocers and other trades people.

Despite warnings from a phalanx of third party observers which oppose the plans on a number of grounds, the government is attempting to push ahead with the scheme, even though we'll all have to pay £200 or so for the dubious privilege of being forced to carry them.

Unwanted software slithered into Patti McMann's home computer over the Internet and unleashed an annoying barrage of pop-up ads that sometimes flashed on her screen faster than she could close them.

Annoying, for sure. But the last straw came a year ago when the pop-ups began plugging such household names as J.C. Penney Co. and Capital One Financial Corp., companies McMann expected to know better.

Even Fortune 500 companies have turned to adware: Sprint Corp. for its PCS mobile phones, major banks peddling Visa credit cards, Sony Corp. and retailers including Circuit City Stores Inc. And Mercedes-Benz USA had its cars flashing on consumer's computer screens before the company, fielding complaints, put on the brakes.

Mercedes-Benz says its ad was carried to hard drives last year by an agency it has since fired, while computer maker Dell USA has fired "a handful" of affiliates for carrying Dell's coupons and ads over adware.

Despite the fact that Microsoft is practically forcing ISPs to adopt its Sender ID anti-spam methods, Sysadmins and network professionals don’t believe it will work.

According to the Sydney Morning Herald, most of the people it interviewed about the latest Volish moves were sceptical that such pressure would work. Yesterday, Microsoft threatened to block mail access to its glorious Hotmail free email service if the mail didn't have Sender ID tags.

But Melbourne-based IT consultant Craig Sanders told the Herald that if Vole starts doing that, then most legitimate mail would be classed as junk.

Sanders said that there was no way that Vole could force everyone to use their proprietary and patented Sender ID proposal because the net didn't work like that.

Computer Associates researcher Jakub Kaminski said that Volish plans to reduce spam using Sender ID would not work, because the early adopters of the system were the spammers.

The Motion Picture Association of America (MPAA) has reportedly issued a correction to its disputed claims that it shut down an illegal DVD/CD replicating plant and seized $30 million in illegal stampers and DVDs:

The trade group said the $30 million figure was reached by estimating the value of the DVDs that could be produced by the stamping machines that were seized.

That's right, could be produced. The MPAA presented potential losses as actual losses. Possible future infringements as current infringements. I wonder if this exemplary for the MPAA's calculation of damages allegedly brought by P2P networks and private copying, for example. Believing that the possible worst is the reality that is. This is not just bad math, this is a mind set: if users can steal, they will steal, thus they actually steal. If users can copy, they will copy. If users can share, they will share. It is in human nature to do so, to do bad.

An Indian researcher has breached the much-touted "impenetrable" Windows Genuine Advantage of Microsoft.

Bangalore-based Debasis Mohanty has cracked WGA through an "easy-to-exploit" weakness in the software for generating illegal copies of the Windows XP programme.

Microsoft confirmed the claims of Mohanty, but sought to downplay it saying, "It represents very little threat." A company spokesperson said they did expect counterfeiters to try a number of different methods to circumvent safeguards provided by WGA.

The end of free Internet content will come when Web browsers start blocking online advertisements by default, a DoubleClick executive has warned.

Bennie Smith, the online advertising network's privacy chief, told ZDNet Australia the popularity of tools like Adblock -- an extension to the Mozilla Firefox browser -- which makes blocking online ads simple was tied to "a negative vibe against advertising in general".

He said if a similar tool could be produced for newspapers, it would not be accepted by consumers.

"You'd go to your local corner shop and buy the daily paper, and you'd have these large holes where the ads were."

Part of the Internet's value proposition lies in the provision of large amounts of free content. "But that content is not without cost. And that cost is my eyeballs seeing an ad on a page. Or within an e-mail, or next to my search results, or however it's going to come," Smith explained.

"In an offline world, what would happen in that case is that the 25c newspaper would cost $5," he said.

By now it should be no surprise that the MPAA likes to overhype lots of things, from the "losses" due to file sharing to the "risk" posed by the VCR ("the Boston Strangler" to the movie industry). The current bosses are no exception, from blaming technology to dire warnings about the end of content, it pays to take most of what they say with an extra big grain of salt. Hopefully, you had that salt handy as you read an announcement trumpeted by the MPAA about how they, along with a "California High Tech Task Force" shut down a Southern California DVD processing plant seizing $30 million worth of DVDs. The implication, though not stated in the article, was that the plant was used to copy DVDs illegally. Perhaps the reason it wasn't stated was because it might not actually be true.

Constitutional Code points to the processing plant company's angry response to the news today, suggesting that almost nothing in the MPAA's announcement was accurate. First off, the company claims they only copy legal DVDs, and are a well established (over 15 years in business) legal DVD and CD reproduction plant. Second, neither the MPAA nor the so-called High Tech Task Force "shut the plant down." After the raid was completed the plant was allowed to return to full production levels immediately. The Task Force did take some DVDs, but the plant believes they were perfectly legitimate DVDs being produced by a well-known public company. Finally, in the MPAA's favorite area, it looks like they completely inflated by ridiculous amounts the "value" of the seized materials. The plant claims that the DVDs taken were worth a grand total of $10,540. The DVD copying equipment seized was worth about $15,000. In other words, the claim of $30 million worth of product seized was exaggerated by a mere 2,000%.

The LA Times pulled down it's "beta" wikitorial after people began inserting obscene content faster than the editors could remove it. Though there is nothing on the LA Times editorial page or in the general coverage, the NY Times notes (free reg req) the fact that the bulk of the vandalism occurred after a posting about the wikitorial appeared on Slashdot and goes on to quote a member of the LA Times editorial staff as saying, "Slashdot has a tech-savvy audience that, to be kind, is mischievous and to be not so kind, is malicious".

Late Friday afternoon, MasterCard released the news about how potentially 40 million credit card holders were at risk of having their data stolen, after discovering a hacker had placed a trojan on the computers of a credit card processing company. That was scary enough, but as the details continued to come out over the weekend, the situation just seemed to get worse and worse. Jeremy Wagstaff notes that the processor in question, CardSystems, apparently knew about the breach for nearly a month but claimed they didn't say anything because the FBI asked them not to -- a charge that the FBI denies. Then comes the best part. The NY Times reports that CardSystems wasn't even supposed to have this data. The company processes credit card transactions, but isn't supposed to keep records of the transactions, as per agreements it signed with Visa and MasterCard. However, these days, when it seems to be common practice to play fast and loose with other people's data, CardSystems hung onto all the data, for its own "research" purposes. It looks like those research purposes just caused plenty of problems for an awful lot of people.