RapidShare will no longer offer incentives to users who share popular content. After having stopped cash payouts for their rewards program some time ago, RapidShare has now decided to discontinue the entire program. The file-hosting service cites complaints by copyright holders that the rewards were facilitating piracy as the reason for this move.

RapidShare and other file-hosting services have been growing at a steady pace over the last years. This growth has not gone unnoticed by the entertainment industry and several rights holders have started legal action against the company behind RapidShare.

Unlike most torrent sites, RapidShare has done well in court. Last month a United States District Court of California ruled that RapidShare is not guilty of copyright infringement. A few weeks earlier a German court ruled that the file-hoster is not liable for acts of copyright infringement committed by its users.

Outside of court RapidShare has sought contact with several major players in the entertainment industries, hoping to start a collaboration by converting copyright infringers into paying consumers. In addition, the company has taken several steps to ensure that they cannot be seen as piracy facilitators.

RapidShare has gone after sites that abuse their trademark to promote piracy, and they have now discontinued the rewards program for its users for the same reason.

“This decision by the company is a reaction to claims that the reward programme rewards the uploading of contents that are protected by copyright. We feel it is necessary to undertake this step as we do not wish RapidShare’s users to be exposed to such an unjustified general suspicion,” RapidShare explained.

The reward programs of RapidShare and other file-hosting services allowed users to earn cash or other gifts if they uploaded popular content. The entertainment industry sees these programs as incentives to upload copyrighted music and movies and possibly urged RapidShare to shut it down.

Previously, a leaked email from former RapidShare boss Bobby Chang to several entertainment industry representatives already revealed that RapidShare was not planning to compete with file-hosting services that were trying to gain the favor of ‘criminals’ (copyright infringers).

“RapidShare has decided not to participate in this battle and not to fight for the favor of criminals. Instead we would rather like to agitate against these activities and – if possible – to institute proceedings against those competitors of ours, who are intentionally supporting criminal activities,” Chang wrote in an email a few months ago.

Whether RapidShare’s most recent move to shut down the reward program will cause it to lose users is yet to be seen. If anything, it may have avoided yet another expensive legal battle while ensuring the site can continue to operate its business.