News > Companies deal this week?
June 8, 2000: 5:33 p.m. ET

Settlement of infringement suit on tap; stock ticks higher
By Staff Writer Franklin Paul
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NEW YORK (CNNfn) - Settlement of a copyright infringement lawsuit between online music service Inc. and the recording industry could be announced before the weekend, according to a source close to the negotiations.

"They are very close," a source familiar with the talks told on Thursday, adding that announcement could be revealed in the next few days.

The pact would come some six weeks after a federal court ruled that, via its internet listening service, unlawfully copied songs without permission, and just one month after pulled the music in question off of its site.

graphicSuch an agreement would allow to return the songs to its site, alongside less popular tunes from mostly unsigned and unknown artists.

The Recording Industry Association of America (RIAA), the trade group representing the labels, filed the suit in January after the launch of and its Instant Listening and Beam-it services. The Web sites allows visitors to listen on a computer anywhere to music from popular recording artists, after telling that they owned the physical disk. seen paying up to $100 million

Speculation swirled on Wednesday that San Diego-based (MPPP: Research, Estimates) and several of the five major record companies were nearing an agreement that called for to pay $75 million to $100 million to the record companies, in exchange for the right to use their songs.

On Thursday, the source said the $100 million figure was "in the ball park."

Representatives for Sony Corp.'s Sony Music Entertainment, Seagram Co.'s Universal Music Group, and Warner Music group, a unit of Time Warner Inc., the parent of the, declined to comment on the issue. Spokesmen for BMG, the music unit of Bertelsmann AG and EMI Group PLC, did not return phone calls seeking comment.

Sources told that an agreement with either BMG or Warner Music would likely be announced first.

RIAA spokeswoman Amy Weiss, in declining to specifically address the settlement rumors, said, "There are discussions ongoing among affected parties."

graphicInvestors warmed to the potential of a friendly resolution to the issue, which could have resulted in penalties for of more than $1 billion.

Shares of on Thursday closed at 17-1/4, up 3/8, after earlier touching a session high of 19-3/4. In April, on the day the ruling was announced, the stock plummeted to an all time low of 6-1/2.

An agreement with would still leave on the table several issue for the recording companies. Each has struggled in the past year to developed their own online music sales and distribution strategies, even as collectively they battle those who make it simple for Web surfers to get popular music for free.

Still outstanding is a similar clash with Napster, which allows enthusiasts to exchange copies of music, in compressed MP3 file format, at no cost.

What's more, even a signed partnership would not likely settle the debate over music on the Web, which some believe should be free, an opinion that angers the music industry.

"In the appropriation of intellectual property,, Napster, and Gnutella are, in my opinion, the ringleaders, the exemplars of theft, of piracy, of the illegal and willful appropriation of someone else's property," Seagram Chief Executive Edgar Bronfman Jr. said at an industry conference in May.

"What individuals might do unthinkingly for pleasure, in my view, they do with forethought for profit, justifying with weak and untenable rationale their theft of the labor and genius of others," Bronfman added. Back to top

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