Taiwan online music file-sharing network Kuro has agreed to shut down its file swapping service and pay undisclosed damages to settle a recording industry lawsuit, the industry group behind the row said.

The settlement comes a year after a separate case produced a landmark criminal conviction against executives at Kuro's operators, Fashionow Co. Ltd., the International Federation of the Phonographic Industry, which filed the civil action, said in a statement released late on Thursday.

Under settlement of the civil case, Fashion Now would stop distributing its peer-to-peer (P2P) swapping software immediately and will ensure closure of the copyright-infringing service by October 15, the federation said.

The Web site will instead operate a legitimate portal for music downloads and would sever all links with the old services, the federation said.

P2P services distribute information directly between users instead of through a central server. Kuro had charged users a monthly fee of T$99 (US$3) to access music files and has an estimated 500,000 subscribers in Taiwan and China.

Executives from Fashionow were unavailable for comment.

But a statement posted on Kuro's Web site said the company had settled the case and also received authorization from international and domestic music companies to operate a legitimate download Web site.

Starting from now, users can enjoy top quality music on Kuro without any doubts about lawsuits or any possibility of being sued, the company said on its Web site (http://www.kuro.com.tw/).

Most of the songs available on Kuro's illegal site were produced by local artists, none of whom were paid by the service, the federation has said.

China Intellectual property law