Many legal and moral issues surround online file-sharing communities. The file-sharing phenomenon has spawned a plethora of legal debates, and has been the central issue in countless lawsuits against the operators of file-sharing communities on grounds of copyright infringment. Napster's centralized nature posed a particular threat to its survival; the Napster operators could be held accountable for having information regarding the location of pirated material on their systems. From Kusek's The Future of Music, “The major record companies… joined forces to sue Napster out of business.”[11] This may have stopped Napster in its tracks, but it in the long run the legal action had the opposite effect of what the record companies tried to achieve: Kusek goes on to mention in his book that “software developers around the world have been creating P2P applications to fill the vacuum [Napster] left, and the online sharing of MP3 files has continued unabated.”[12]

In 2003 and 2004, the RIAA sued a plethora of people over the illegal trade of music online. One man, Jesse Jordan, was forced to pay 12,000 dollars in a settlement with the RIAA (Jesse was a college student who had a particularly large collection of songs).[13] Public Enemy's Chuck D said this about the flurry of lawsuits made by the RIAA: “Lawsuits on 12-year-old kids for downloading music, duping a mother into into paying a $2,000 settlement for her kid? These tactics are pure Gestapo.”[14]

To follow up on the comments made about Youtube.com and the pirated material uploaded there by its users: Youtube.com often has agents that look through the material posted to their website; these agents, when they find pirated or inappropriate material, remove it from Youtube.com. Websites that rely on the same principles as Youtube.com have similar practices.