IANAL, but how can Audibie possibly be legal? Since the doctrine of inducement appeared (ref Grockster) I can’t see how the DCMA safe-harbor provisions would save them. Perhaps they are relying on the fact that they don’t host the files themselves – although that didn’t save Grockster or Napster.

It’s interesting to think what Facebook’s liability would be over an application like this. Facebook have a currently have a copyright policy which passes responsibility for DMCA takedown requests onto the application author. Audibie have posted their takedown procedures, in accordance with the DCMA.

If I was Facebook I’d be pretty worried that might not be enough.