BBC News Online: Business

MP3.com settles with EMI

MP3 software allows users to store music digitally and access it via a computer or a special MP3 player.

A US District Court had ruled in April that MP3.com violated copyright laws when it set up a database that allowed users to swap music files over the internet.

The settlement comes one day after a decision by a US judge to shut down Napster, another online music swapping service.

Publishers fear that MP3 and other formats allow people to make high-quality copies of records and distribute them without paying any royalties.

The terms of MP3's deal with EMI have not been disclosed, but the company is expected to pay about $20m in damages, and a fee each time a recording with EMI copyright is registered on its websites.

Further fees will have to be paid when web surfers download these songs.

Choice for fans

EMI has welcomed the settlement.

"EMI's internet strategy is to create innovative, convenient and attractive ways for fans to access their favourite artists' music," Jay Samit, senior vice president of new media at EMI, said.

"This settlement ensures that copyright owners and creators are compensated fairly," he added.

EMI, meanwhile, will publish its recordings on MP3's Beam-it and Instant Listening services.

MP3 still has to settle with Sony Music and Universal Music Group.

The company is threatened with billions of dollars of punitive payments if it fails to settle the case against it.