Congress enacted the No Electronic Theft (NET) Act in 1997 to facilitate prosecution of copyright violation on the Internet. The NET Act makes it a federal crime to reproduce, distribute, or share copies of electronic copyrighted works such as songs, movies, games, or software programs, even if the person copying or distributing the material acts without commercial purpose and/or receives no private financial gain. Prior to this law being passed, people who intentionally distributed copied software over the Internet did not face criminal penalties if they did not profit from their actions. Electronic copyright infringement carries a maximum penalty of three years in prison and a $250,000 fine.
The NET Act is applicable in situations such as running a file sharing application with outgoing transfers enabled, hosting files on a web account, transferring files through IRC, and other methods of making copyrighted material available over networks.