?Reporting will make Kazaa look like spyware, as soon as it becomes evident we record downloads and playbacks, users will flee to competitive networks. And 3 rd issue is legal issue that stats might open up. One can argue that we have knowledge of copyrighted material being downloaded in our network and have to install filters. If we are reporting [gold] files, then technically we could do same for any file.?

Both companies (Sharman and Altnet) know what is downloaded and by whom and when, as well as where they need to be redirected to give them the files they asked for.