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Federal Investigation Into Napster Lawsuit
May 31, 2006

In 2003, the Justice Department ruled that the major labels had not worked in collusion to fight against the early days of digital music sales. Now it appears that the government is taking another look at that decision, with federal antitrust investigators once again considering claims that the labels conspired against Napster.

Sources tell the Los Angeles Times that the Justice Department is keeping an eye on a San Francisco court case between the labels and Napster's original investors, Hummer Winblad Venture Partners and Bertelsmann, which of course owns BMG. The labels are accusing the Napster investors of contributing to music piracy by supporting the early version of Napster. Hummer Windblad, on the other hand, has said that the labels were in violation of anti-trust laws and colluded to not license music to Napster for legal downloading.

It is currently not known if the department is considering re-opening the case again. In the current court case, Judge Marilyn Hall Patel said that documents referencing label deals brought forth by Hummer Windblad were "deliberately misleading." Patel's ruling in the case, which is being moved to a higher court, helped spark the interest in the case once again from the U.S. government. New York Attorney General Eliot Spitzer is also now investigating the label documents, and the Times reports he has subpoenaed the labels in reference to the case.

EMI North American SVP Jeanne Meyer defended the labels, telling the Times that, "EMI was forthright with the Department of Justice in its 2001-03 investigation and cooperated with that inquiry, and we are confident that Judge Patel's ruling will be reversed."




 
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Rich Bengloff

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