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Wasn't a lot of this a result of the ISPs getting pissed at the rights holders? They were being subpoenaed for their customers' names in all of these legal cases, which pissed off the customers obviously but also gave them a ton of work.
So this was a compromise - stop suing all of our customers, especially first time offenders and people your going to look like assholes going after, and we'll proactively tell them they're doing illegal stuff. That's the way I remember it anyway.
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