Effectively the music industry maintains that sharing one file leads to a loss of 1000 sales. They claim that these funds need to be recovered and use this as a justification to sue huge numbers of people, unhampered by the burden of proof.
The funds that the RIAA recovers are not returned to the record companies and used to pay salaries, develop artists and pay royalties. The funds are immediately rolled back into the lawsuits.
This invalidates the basis of the RIAA's argument - that the artists need to be paid.
RIAA also sues a whole range of people based on very, very flimsy 'evidence'. This results in many innocent people getting caught in the net and being forced to settle with the RIAA to the tune of $3750 - which doesn't even indemnify them against future litigation.
Innocent people are forced to settle as the alternative - fighting the case in court - would require the defendant to have as deep or deeper pockets than the RIAA.
Pure and simple - scare tactics. Tactics that are not working and only serve to alienate law-abiding citizens and tarnish the image of the music industry and the most important but often overlooked player - the artists.
