Media giant Bertelsmann has made its first settlement in a $17 billion lawsuit from music publishers over its funding of the original version of Napster, the now defunct file-sharing service, according to The New York Times.

The settlement with small record company Bridgeport Music will cost Bertelsmann around $50,000, said The New York Times. Bridgeport settled because "it was just not cost effective" to continue, according to its lawyer. The roots of the dispute date back over four years to when Bertelsmann, which owns BMG, one of the world's largest music companies, invested more than $85 million in Napster in the hope of turning Shawn Fanning's creation into a legitimate, profitable subscription service. At the same time, several record companies, including BMG, were suing Napster for copyright infringement. The service shut down in June 2001, buckling under the financial strain of legal battles. The Napster brand has since re-launched under new ownership as a legitimate music download service. In 2003 a group of independent music publishers and songwriters turned on Bertelsmann, filing a $17 billion suit that claimed that Bertelsmann's financial support to Napster facilitated copyright infringement by prolonging the life of the service and allowing millions of users to swap copyright protected music on-line. The suit further alleged that Bertelsmann knowingly colluded with Napster in the infringement of copyright, since the funding was not conditional on the illicit sharing of music being stopped. The settlement means that Bridgeport now drops out of the suit, which will continue.

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