Industry Group Sues MP3.com

From the start, MP3.com's Instant Listening Service and Beam-it utilities were controversial. Friday, the other shoe dropped.

As expected, the Recording Institute Association of America, or RIAA, filed suit against MP3.com, alleging that the utilities constitute a "blatant infringement" of copyright laws.

"The foundation on which these services are built is an unauthorized digital archive of the most valuable copyrighted recordings in the world," says RIAA general counsel Cary Sherman in a statement. "Frankly, it's astonishing that a publicly-traded company would behave so recklessly."

MP3.com's Instant Listening Service and Beam-it were introduced on Jan. 12. The services were billed as new technologies that allowed consumers to "listen to their music anywhere, anytime." When an MP3.com customer buys a CD online through an MP3.com partner, the CD's songs can be transferred immediately into the customer's on-site account at My.mp3.com. Similarly, the Beam-it service allows a consumer to put an already-owned CD into a computer's disk drive, have the CD recognized and its songs transferred into their account.

"What is truly exciting is that once you own a CD, it can be listened to anywhere in the world through MP3.com," MP3.com chairman Michael Robertson said when the service was introduced. "Not only will music fans be able to listen to their own CD collection on a standard PC, but they will also be able to listen to them through the wide assortment of new Internet appliances that are being developed for the market."

To accomplish this feat, MP3.com bought 40,000 CDs, ripped each CD's tracks into MP3 format and created a database. The copies transferred into customers' accounts actually come from the database on MP3.com's servers, not from recordings individually owned by consumers.

This is what's problematic to the RIAA and copyright advocates. The Copyright Act of 1971 prohibits anyone but the copyright owner from making a copy of a recording. An exception to that law was created by Congress by the Audio Home Recording Act of 1992 which prevented consumers from being sued by record companies for making copies of recordings for their own use.

"The copy was made by MP3.com, not by the consumer," notes Entertainment Law Reporter editor Lon Sobel. "I couldn't imagine how they thought that what it was doing was legal."

MP3.com's Robertson said in a statement Friday that his company plans to fight the complaint.

"On behalf of consumers, we are disappointed that the positive benefits and security features of our newly upgraded My.MP3.com service are misunderstood by some people in the music industry," said Robertson. "My.MP3.com provides more choices for consumers to do what they want with the music they already own. Our technology also enables artists to communicate directly with their fan base. We believe My.MP3.com will stimulate CD sales and be a financial boon for the music industry overall."

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