Says Legal Charges Reduced

SAN FRANCISCO (08/01/2000) - A U.S. judge's decision Tuesday significantly lowered the damages online music Web site Inc. would need to pay out if it loses a lawsuit filed against the company by several major music labels.

New York District Court Judge Jed Rakoff denied the Recording Industry of America's (RIAA's) request Tuesday to issue a summary judgement against The judge's decision makes the firm liable for the music CDs it features on its Web site, and not for individual songs, according to a spokesman.

If found to be in violation of copyright laws, would have to pay much more if the judge had ruled in favor of the RIAA, because most CDs contain between 10 to 13 songs, the spokesman said. While reparations may still be due, the amount demanded by the music giants involved in the case should be lowered by focusing on albums instead of particular songs, he added.

Earlier this year, a number of major music labels filed a lawsuit against for placing the digital versions of thousands of compact discs on its Web site without the labels' consent. The record companies looked to New York-based Judge Rakoff to grant a summary judgment and thus make each song placed on's Web site an issue for damage collection.

The judge plans to provide details of his decision via a written opinion sometime in the future. It appears doubtful that the judge plans to return to this issue when the case goes to trial on Aug. 28, according to the online music site's spokesman.

"We will not comment until we see the judge's decision," a RIAA spokeswoman said Tuesday. features over 424,000 songs by close to 70,000 artists on its Web site.

The site provides some songs for free, and charges for others. Although the majority of the firm's revenue stems from advertising, it also does sell albums. reached agreements with EMI Group PLC, Warner Brothers Music Group Inc. and BMG Entertainment Inc. (BMG) earlier this year to feature music from those companies on its site. [See ", EMI Reach Settlement," July 28 and UPDATE -, Record Labels Settle Suits," June 9.] The Net firm still, however, faces litigation from Sony Corp.'s music units, Seagram Co.'s Universal Music Group (UMG) and other music publishers.

"We have always believed a resolution is in everybody's best interests. We just want this to end,"'s spokesman concluded. Company Chairman and Chief Executive Officer Michael Robertson was unavailable for comment Tuesday., based in San Diego, California, can be reached at +1-858-623-7000 or The RIAA, based in Washington, D.C, can be reached at +1-202-775-0101 or at

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