UMG Sues Bertelsmann Over Napster Involvement

Universal Music Group (UMG) has filed suit against Bertelsmann AG over the German company's relationship with defunct online file-sharing network Napster. It alleges that Bertelsmann "took numerous ac

Universal Music Group (UMG) has filed suit against Bertelsmann AG over the German company's relationship with defunct online file-sharing network Napster, Billboard Bulletin reports.

The suit, filed yesterday (May 12) in U.S. District Court for the Southern District of New York, is similar to a separate complaint filed by a group of music publishers earlier this year. It alleges that Bertelsmann "took numerous actions that directly and materially contributed to the millions upon millions of illegal acts of copyright infringement by the users of the Napster system."

Bertelsmann loaned Napster $50 million in October 2000; the network shut down under court order in July 2001. UMG claims the loan was nothing more than a "scheme" that "would shield [Bertelsmann] from liability for the massive infringements."

The suit alleges that, while Bertelsmann attempted to convert Napster to a legal network, the company "wanted to exploit the Napster system without losing its user base." Bertelsmann is liable, UMG says, for supplying funds that allowed Napster to "expand the unlawful infringement of plaintiff's copyrights."

UMG seeks a jury trial and damages of $150,000 per infringed track. A source says UMG could argue that "thousands and thousands" of its songs were on the Napster network. A Bertelsmann spokesperson had no comment.