Faced with potential legal action, Harvard alum Sam A. Yagan ’99 announced at a Senate hearing last Wednesday that he will no longer allow unrestricted file-sharing using his company’s software.

Yagan, who is the president of MetaMachine—a company that distributes the peer-to-peer program, eDonkey—testified before the Senate Judiciary Committee that he is working with recording companies on ways to make file-sharing legal with eDonkey.

On Sept. 13, the Recording Industry Association of America (RIAA) began a letter-writing campaign aimed at seven of the largest file-sharing companies, including MetaMachine, which set the stage for a large-scale litigation process. Yagan cited this correspondence and high legal costs as the major motivation for his move to privatization.

“You’ve got a massive army of lawyers against you, so its not even a fight worth winning,” he said.

But Yagan maintains that his company never violated any copyright laws. According to the current interpretation of the law established by the recent Supreme Court decision MGM v. Grokster, it is not illegal to sell file sharing software. Rather, it is against the law to encourage illegal downloads.

“We never had ads saying ‘download Britney Spears here’,” Yagan said. “We never did that.”

According to John Palfrey, executive director of the Berkman Center for Internet and Society, as the law stands now, it is legal for companies to distribute software that makes it possible to share files illegally.

But Palfrey also reiterated the importance of the individual copyright laws concerning file-sharing.

“It always has been and still is illegal for the individual to do the downloading [of copyrighted material],” he said.

Palfrey also said the laws were ambiguous with respect to the file-sharing companies.

“The Grokster opinion was Solomnic because nobody hated it. It can go either way,” he said.

The RIAA investigates both individuals and companies in its fight against illegal file-sharing. The Daily Princetonian reported on Wednesday that a Princeton student is being sued for file-sharing. Eighteen Harvard students have faced similar legal action, and 10 of them have settled out of court.

In each instance, the RIAA only had the IP addresses of the involved students and thus filed “John Doe” lawsuits. These anonymous lawsuits were then followed with subpoenas that compelled administrators to release the identities of the students using the IP addresses in question.

RIAA spokeswoman Jenni R. Engebretsen wrote in an e-mail that it is now imperative to educate students about piracy laws.

“College students are some of the most avid music fans,” Engebretsen wrote. “Because the music habits and customs they develop now are likely to stay with them for life, it’s especially important for us to educate them about the law, the harm suffered by musicians, labels and retailers alike, when music is stolen and the great legal ways to enjoy music online.”

But Yagan, who studied Applied Mathematics as an undergraduate at Harvard and later received his MBA from Stanford, said that the file-sharing debate should be focused on the industry as a whole rather than the legality of individual file-sharing.

“All I would say to the students at Harvard is that this issue goes far beyond downloading music,” Yagan said. “This is about what companies we are allowing to exist in our country. This is about what we’re allowing entrepreneurs to do in our country today.”