You know there’s a scam afoot when some big entity wants something enacted which will profit them handsomely, but holds up a sympathetic face as the “real” benefactor of the scheme. Wealthy people and corporations do this all the time through politicians–whenever there’s a tax cut for huge corporations, for example, the “small business owner” is always trotted out as the real reason the tax cut is being proposed. But in reality, small business owners end up getting reamed because the real benefactors, big business, become more engorged and able to crush the small business owners.

This is the strategy used by the music labels when they do anything concerning their “war on piracy”: they trot out the poor, beleaguered artist, claiming that it’s all for them. Of course, none of it’s for the artist–the artists, of course, get reamed by the labels, who force them into horrifically unfair contracts. The music industry is nothing more than a parasite, a middleman grown into a monster which dominates the entire business, holding both artists and audience hostage. Whenever the labels want a “piracy tax” on blanks CDs, digital audio players, or any music delivery system “for the artists,” you can be damned sure that the artists aren’t getting squat from it. Whenever they want new legislation which gives them perpetual control over something you have paid for, or the ability to violate your privacy or otherwise treat you like a criminal, or to sue more easily so they can extort more money from those unable to defend themselves, you can be sure that the winnings don’t ever get distributed to the artists.

Case in point: the artists are suing the music industry in Canada for stealing their music and not paying for it. Yep: the big music labels–Warner, Sony BMG, EMI, and Universal–have been pirating music for more than two decades. That’s right, they were pirates before online file sharing was even possible.

Here’s how the scam works: in Canada, there’s a loophole in the copyright law which says that if a music label wants to create a “compilation” CD (hey, that’s a mix tape!), then they don’t need to get the artists’ permission beforehand. Instead, they only need to make the CD’s and then place it on a “pending list,” the claim being that they will eventually get the permission of the artists and pay them the required royalties.

You get one guess as to how that worked out.

Yes, that’s right: the music labels put more than 300,000 songs on the “pending list,” and never paid for them. Maybe that should be the legal defense for any P2P file sharer sued by the labels: “The songs were on my Pending List! I was eventually going to pay for them! After a few decades! Maybe!” Why not–after all, that’s what the music labels have been doing, cheating the artists out of at least $50 million in royalties.

The irony of this situation deepens: you know how the music labels lobbied for and got a ridiculous $7500-per-song penalty against file sharers? Well, by Canadian law, there is a potential $20,000 penalty per song which is abused in this fashion–meaning that the labels are now potentially liable for more than $6 billion in damages.

And the artists are suing.

It will be interesting to see how the industry defends itself. They’re the ones who have been claiming that ripping off artists is the primary crime committed; they’re the ones who have pressed for the full damages possible when they even have circumstantial evidence of stolen music. And in this case, the music labels themselves have admitted they’re doing this.

I am certain that I am not the only one here who hopes that (a) no settlement is reached, and (b) the court rules for the artists to the full extent of the law. The only regret here is that the labels will probably be able to limit damages to their Canadian branches only–the bulk of their businesses are probably shielded from damages. But if the Canadian labels claim they aren’t worth a collective $6 billion, then they can simply have 100% of all music profits redirected right into the artists’ pockets, with interest, until the full amount is paid off.

After all, it’s for the artists.