... word is going around that the RIAA asked social music service Last.fm for data about its user's listening habits to find people with unreleased tracks on their computers. And Last.fm, which is owned by CBS, actually handed the data over to the RIAA. According to a tip we received:
I heard from an irate friend who works at CBS that last.fm recently provided the RIAA with a giant dump of user data to track down people who are scrobbling unreleased tracks. As word spread numerous employees at last.fm were up in arms because the data collected (a) can be used to identify individuals and (b) will likely be shared with 3rd parties that have relationships with the RIAA.
Reporter Erick Schonfeld's story had several red flags that it might be bogus, including the weasely phrase "word is going around" and the fact that he got it secondhand from a friend of a CBS employee, not directly from someone at CBS, Last.fm or the RIAA. But the allegation was so spectacularly damaging that it spread quickly across the web, scaring users into deleting their Last.fm accounts. They had good reason to be concerned. Users running Last.fm's AudioScrobbler software tell the service every song they play on their computers. If you're playing pirated songs from an album not yet released, and they RIAA finds this out, its lawyers could sue you so hard your grandmother gets served.
Last.fm founder Richard Jones says that TechCrunch is full of bleep:
On Friday night a technology blog called Techcrunch posted a vicious and completely false rumor about us: that Last.fm handed data to the RIAA so they could track who's been listening to the "leaked" U2 album.
I denied it vehemently on the Techcrunch article, as did several other Last.fm staffers. We denied it in the Last.fm forums, on twitter, via email -- basically we denied it to anyone that would listen, and now we're denying it on our blog.
Schonfeld has updated the story several times in response to angry pushback, digging a deeper hole each time:
From the very beginning, I've presented this story for what it is: a rumor. Despite my attempts to corroborate it and the subsequent detail I've been able to gather, I still don't have enough information to determine whether it is absolutely true. But I still don't have enough information to determine that it is absolutely false either.
Calling something a rumor doesn't give journalists a free pass -- spreading a bogus rumor can have the same consequences as passing along bogus information, and in either case the reporter owes readers an explanation of why the story was published. TechCrunch needs to explain why it trusted the friend of a CBS employee with a secondhand tip, whether anyone tried to contact the employee to corroborate the claim and whether it was wrong to run such a damaging story without at least one source who had direct knowledge of the alleged data transfer.
Time magazine recently declared TechCrunch one of the most overrated blogs, stating that the the site has become "irrelevant." That judgment isn't borne out by the traffic, but this story shows one reason why TechCrunch has lost some of its rep. Like other pro blogs constantly churning out new posts, TechCrunch is more concerned with being first than being right.