Australia's Federal Court ruled that managers of peer-to-peer platform Kazaa had authorized users to infringe on music copyrights and said it could stay in operation if it modified its software to minimize infringement, reports CNET. Justice Murray Wilcox ruled largely in favor of music labels, which had argued that Kazaa (owned by Australia-based Sharman Networks) encouraged massive copyright infringement.

The labels also targeted U.S.-based Altnet, a Sharman partner and provider of search technology for Kazaa, alleging that Sharman and Altnet had conspired to attract thousands of copyright infringers to Kazaa in order to profit from advertising revenue.

A separate hearing will be held for the music industry's claims for damages.