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uhh, why are you dealing with this and not the lawyers?
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I think Jaan has a point. If you aren't their attorney then it's not your job to worry about it. Out of courtesy, a simple notification of what you found should be the end of your responsibility. If you manage the site, then you should make sure in future to let them know the upside and the downside of not putting some sort of protection on downloadable goods, and I hope you did this in the beginning, before this happened. And if they choose to cheap out, it's on them when stuff like this happens.