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Online file swapping service KaZaA has temporarily suspended downloads of its KaZaA Media Desktop client software in a move to avoid a hefty fine, the company said on Thursday.

Dutch music licensing body Buma/Stemra decided to enforce a ruling handed down by the Amsterdam district court on November 29, KaZaA said. In the ruling, KaZaA is ordered to make it impossible for users to share copyright-protected material using the KaZaA Media Desktop, or face a fine.

"We were in court with Buma/Stemra on Wednesday and asked the judge to clarify what he means by his ruling and what the scope of it should be," KaZaA Chief Executive Officer Niklas Zennstrom said in an interview, adding that the judge is to render his decision on January 31.

However, the enforcement is in place, meaning KaZaA would have to pay a $40,000 per day fine if the court decided KaZaA hadn't complied with its order.

"KaZaA doesn't have the resources to pay that kind of money and we don't know what the ruling will be, so we decided to take the most drastic measure possible, which is to temporarily suspend download of our client," Zennstrom said.

KaZaA feels the November 29 ruling, which it has appealed, is unclear and maintains it can't disable the clients that have already been downloaded. The company also questions whether the judge has jurisdiction outside the Netherlands.

"It seems the judge doesn't completely understand what our software does," said Zennstrom.

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KaZaA Media Desktop is a peer-to-peer file sharing application that allows users to search for and download files, such as MP3 files, over the Internet. Unlike the original file swapping service run by Napster, KaZaA does not rely on a central server to let users search for and download files.

KaZaA Media Desktop is based on peer-to-peer technology developed by FastTrack, a sibling company to KaZaA also based in Amsterdam. To date, more than 30 million copies of KaZaA Media Desktop have been downloaded, with over 1.1 million downloads during the last week, according to KaZaA.

KaZaA and Buma/Stemra have been in licensing negotiations for a streaming music service. The judge in the same November 29 ruling ordered the licensing body to continue those negotiations, and talks are still ongoing.

"We were surprised by Buma/Stemra enforcing the ruling. It is inappropriate in light of the negotiations," said Zennstrom.

In the United States, KaZaA faces suits from the Recording Industry Association of America and several major Hollywood studios, which allege copyright infringement. The RIAA has successfully forced file sharing site Napster to change its policies and ensure compliance with copyright laws. A court date for the U.S. case has not yet been set, Zennstrom said.

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