Napster Wins a Round
On February 22, Judge Marilyn Patel of Federal District Court in Northern California wrote that she "found reason for concern" that the industry's five major labels had colluded to create a virtual monopoly of the burgeoning online music business. "If Napster is correct, these plaintiffs are attempting the near monopolization of the digital distribution market," Patel determined. Napster's attorneys have argued that the music industry has acted cohesively to prevent alternate methods of distribution.
Many would-be online music services have complained that the industry makes licensing deals impossible. In October, the US Justice Department began its own investigation into potential antitrust violations by the music industry in dealing with the digital market.
Patel agreed that the court should allow evidence that could compromise the labels' credibility and possibly undermine their lawsuit against Napster. The record companies insist that they have not colluded, despite the fact that their recently launched online services are joint ventures—pressplay backed by Sony Music and Vivendi Universal; and MusicNet backed by EMI, BMG, and AOL Time Warner, parent company of Warner Music Group. "The courts are relying entirely on a record submitted by Napster, which has neither been tested nor refuted by record companies," said Matt Oppenheim, senior vice president and general counsel for the Recording Industry Association of America (RIAA).
Napster has also questioned whether the record labels actually own all the copyrights to all the songs they claim to own. Although Judge Patel expressed doubts that the labels would have signed contracts that did not provide them with legal ownership of the music, she said that Napster's attorney could seek documentation from them to prove that they do have such rights. The discovery process could add months to an already overly long piece of litigation. Napster has been shut down for many months as a result of an injunction obtained by its opponents. Judge Patel has described all the participants in the trial as "dirty." There may, in fact, be no good guys in this story.