[Update: Audio is now telling us that it expects to be back online “within the next several days.” Here’s what happened, according to Audio: It was given a DMCA takedown request from a record label, sent via the RIAA — then Facebook decided to take Audio offline while the matter remained unresolved. Facebook isn’t commenting on this odd situation, except to say that “any application is allowed on the site if it complies with our terms of service.” ]

facebook.pngFacebook completely removed the Audio music-sharing application from its platform last night, saying it violated music copyrights.

Audio was developed by a third party using Facebook’s platform for developers, and Facebook says Audio violates its newly updated developer terms of service.

Audio allowed users to upload audio files in the mp3 format, share them with each other and listen to them within Facebook. By the end of last week, it had nearly 750,000 users.

The move is significant for two reasons. It shows Facebook is taking a harder line on third-party developers using its site in ways that could be considered illegal. It also shows that Facebook may be giving developers a smaller window to mend their ways — Facebook updated its terms of service for developers on July 25, and notified Audio at that time that it was in violation. It pulled Audio last night — less than a week later.

Audio first came to our attention because it experienced runaway growth on Facebook immediately upon the launch of Facebook’s developer platform in late May.

The company tells us that Audio has had “sufficient notice” to make adjustments. It actually removed Audio once before, within two days of launching its developer platform in May (our coverage). No clear reasons were given at the time, but it is our understanding that Facebook was having an internal discussion about the legality of Audio. However, Facebook re-instated the application only a couple of days later.

Audio continued to grow within the first couple of weeks after launch, reaching nearly half a million users. We noticed that its growth gradually slowed while competing music-sharing applications such as iLike continued to grow. We noticed that Audio’s message board filled with debate about its legality, and about potential liability faced by those using it.

We noted, then, that Audio highlighted how Facebook could potentially be held responsible for using its platform in ways that could make it susceptible to challenges from the record industry.

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