MP3.com has agreed to pay $53.4 million to Universal Music Group in
settling its case against the last of five major record labels that
sued the on-line music company for copyright infringement. The
settlement is significantly below the range of damages awarded to
Universal by a court in September which was between $118 and $250
million.
A judge announced the court-approved negotiated settlement which
represents both damages and legal fees.
The action began in January 1999 when Universal, Warner, BMG,
EMI and Sony filed a lawsuit challenging MP3.com's copying of
thousands of copyrighted CDs onto its file servers to create its
My.MP3.com “locker” service. MP3.com has agreed not to appeal the
judgement, having now settled with all major record
companies.
Universal has also granted MP3.com a non-exclusive, North American
license for the use of its on-line services.
Zach Horowitz, President and Chief Operating Officer of
Universal said:
“Although we believe our proof at trial
would have led to a greater damage award, we are satisfied with the
award. It was never our intent to put MP3.com out of business with
a judgement so large that it would threaten their viability as a
company. We support the development of legitimate music businesses
on the internet.”
Universal has said it will give its artists half of the damages
awarded. The settlement terms reached with each of the other four
major record labels is reported to involve payment to them of
around $20 million plus royalties. MP3.com said after yesterday’s
settlement that the total sum payable to all five companies is
within its $170 million budget set aside for legal costs. Some
smaller record labels bringing actions have not yet settled with
MP3.com.
