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MP3.com, Inc. (Nasdaq: MPPP) was down 1/32 at 4 early Tuesday after EMusic.com, Inc. (Nasdaq: EMUS) said it sued the online music company for copyright infringement.
Emusic filed a complaint in a federal court in New York, alleging that MP3 is using their music without authorization. Fearless Records, Fuel 2000 Records, Gig Records, Invisible Records, SpinART Records and Victory Records joined Emusic in its complaint.
Emusic said it expects more independent labels to join the suit as it progresses.
"Although MP3.com has entered into settlement agreements with the five major record labels, they have chosen to ignore their infringing actions with respect to independent record labels," said Emusic president and chief executive officer Gene Hoffman.
Emusic said it has the exclusive digital copyrights to approximately 13,000 albums from more than 600 record labels. The company said it is "unable to determine" how many albums have been allegedly infringed by the MP3.com service.
Last month, MP3.com settled a copyright infringement suit brought by Universal Music Group. The company had previously settled suits with other recording giants, and said the Universal deal gave it licensing agreements with all the major record companies. In addition to a licensing pact, the settlement gave Universal the right to buy equity in MP3.com.
The Emusic suit is not the only one hanging over MP3.com. The company has also been sued by a group including Unity Entertainment for copyright infringement.
Emusic, through its Web site, lets users buy individual tracks for 99 cents each, or download entire albums for US$8.99 apiece. The site also offers a digital music subscription service.
Emusic shares were down 1/16 at 9/32 early Tuesday.
