Even More Legal Woes for MP3.com

MP3.com (www.mp3.com) can't seem to stay out of the courtroom. Emusic.com ( www.emusic.com) and several of its independent record label partners have filed a copyright infringement complaint in the United States District Court for the Southern District of New York, against MP3.com and its My.MP3.com streaming service.

The My.MP3.com service was re-launched in early December after a settlement was reached with Universal Music Group (UMG). UMG was the last to settle of the five major record labels that brought suit against MP3.com. MP3.com now has licensing agreements with: Universal, Sony Music Group, Bertelsmann's BMG Entertainment, Warner Music Group and EMI Recorded Music, as well as with the National Music Publishers' Association.

Soon after the settlement with Universal, a group of minor record labels and artists brought suit against MP3.com. Emusic and its partners are the latest to enter the fray.

"Although MP3.com has entered into settlement agreements with the five major record labels, they have chosen to ignore their infringing actions with respect to independent record labels,'' said Gene Hoffman, EMusic president and CEO in a statement.

Emusic recently announced plans to include a streaming feature in its subscription service by the end of the second quarter of 2001. In following its public stance regarding the rights of copyright holds, it worked out an agreement with the Harry Fox Agency (HFA) to pay HFA a mechanical royalty fee of one quarter of a cent ($.0025) each time a song is streamed by a user. MP3.com worked out a similar agreement with HFA in October for its My.MP3.com locker service.

In November, Emusic went after copyright abusers on Napster, by tracking its own media files that were traded and sending a message to the user to remove the Emusic file from the public folders or have their account terminated.