MP3.com told to pay $250m

A federal judge in the United States has found the music-sharing web site MP3.com guilty of copyright violations and ordered the firm to pay up to $250m to record company Universal Music Group.

District Judge Jed Rakoff said it was necessary to send a message to the internet community to deter copyright infringement.

Before the judgement, a lawyer for MP3.com had called any fine above $5m a virtual "death sentence" for the company.

Universal, the world's largest record company, had accused MP3.com of copying 5,000 to 10,000 of its records and storing them in the digitial and compressed MP3 format on its website. From there users could freely download the music.

The exact size of the fine will be determined at a later hearing, where Universal and MP3 will argue over which copyrighted records were actually in the website's database.

Settlements

In April, US District Judge Jed Rakoff had ruled that the My.MP3.com database of 80,000 albums had broken copyright law.

MP3.com then settled with most giants of the recording industry, Warner Bros., Sony Music Entertainment, Bertelsmann's BMG, and EMI.

Universal, however, insisted on a trial, and now has won payments of $25,000 per compact disc.

Judge Rakoff said he could have awarded as much as $150,000 per CD, but chose a considerably smaller amount because MP3.com had acted more responsibly than other web startups.

Universal had urged a stiff penalty, saying that if music copyright infringements were allowed, then video and books might follow.

MP3.com said it would appeal against the decision. Michael Rhodes, a lawyer representing the firm, said: ""We built technology that lets people listen to their own CD collections."

He said Universal did not deserve a "windfall" and argued there was "not one iota of evidence that they even lost a penny".