Napster trial judge lambasts music biz

But don't expect a pro-Napster ruling any time soon


Now here's a thing. Judge Marilyn Hall Patel, who presides over the music industry's attempt to beat Napster into line and who has, in the past, displayed strong anti-Napster zeal, has now turned around and given the music biz a tongue-lashing.

At the centre of the her complaint is the apparent attempt by MusicNet, one of the two industry-sponsored digital music distribution companies, to tie Napster into an exclusive deal. This, reckons Patel, smacks of anti-trust behaviour. Her feeling is, she said, that MusicNet has used its control of the distribution of copyright material to limit Napster's access to other content. That, in essence, is a misuse of copyright which, if proven, would eliminate copyright holders' scope to enforce their copyrights.

Napster fans hoping this will get the company off the hook are likely to be disappointed. MusicNet is an independently run joint venture of three music companies - EMI, BMG and Warner - and RealNetworks. Well, independent of the labels, at any rate, but not of RealNetworks, whose CEO, Rob Glaser, is also acting CEO of MusicNet.

As such, it can be argued that the labels aren't responsible for the actions of MusicNet, and since they, not the distribution company, are the ones suing Napster, it's questionable how relevant the exclusive deal is to this case. The anti-trust argument is backed by the presence of the music companies, but since not all of the major labels are represented - Sony and Vivendi Universal have their own distribution JV, Pressplay - its questionable to what extent this is an attempt to restrict business.

Music industry insiders close to MusicNet and cited by CNET claim the exclusivity contract was the work not of the labels but of RealNetworks, which makes sense. EMI, BMG and Warner don't care whether Napster offers tracks from Sony and Universal, any more than they don't want Tower Records to sell other labels' CDs. Labels don't care who retailers stock so long as their own titles are made available to buyers. That's why EMI recently signed up with Pressplay too, for instance.

Indeed, none of the labels so far as we can tell have exclusive deals with either Pressplay or MusicNet, and neither have any of the digital distributors' other retail partners. In short there's no reason why labels won't offer their musical content to other distributors. Indeed, EMI has already done this.

However, RealNetworks, as a content provider rather than a content source, does care what its rivals get to offer, and we can well imagine it trying to limit the material open to Napster, though we stress there's no evidence that it has actually done so. Either way, we can't understand why Napster would sign a contract limiting its scope to distribute tracks when having as broad a base of songs to offer is vital to its future business.

But as we said, RealNetworks isn't one of the companies suing Napster so arguably is actions - however they may appear - are irrelevant to the case in question.

Still, the affair has rankled with Judge Patel who said it "looks bad, sounds bad, smells bad" even if no anti-trust behaviour is found to be behind it. That could well persuade her to the refer MusicNet to the US anti-trust authorities, but it seems unlikely to deflect her from ruling in the music industry's favour and against Napster.

For instance, she dismissed Napster's argument that, like an ISP, it is protected by the Digital Millennium Copyright Act from the infringing actions of its users. ®


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