The decision follows a court decision in a case brought by the Recording Industry Association of America (RIAA), an organisation representing five major record labels, for copyright infringement. MP3.com has been in negotiations with representative of the RIAA in an attempt to avoid damages which the record industry estimates at $6 billion.
Robin Richards, president of MP3.com said it regrets this new step and that it would inconvenience over 500,000 My.MP3.com account holders.
The My.MP3.com service was launched in January 2000. The company built up a library of popular CDs, copied them onto a server accessible from its web site and invited subscribers to customise and download the music files from any location. In an attempt to avoid copyright infringement, subscribers were required to either demonstrate that they already owned any of the CDs from which they wanted to download MP3 format tracks or purchase the CDs from an on-line retailer co-operating with MP3.com.
However, the precautions were insufficient. Judge Jed S. Rakoff said MP3 was simply replaying for the subscribers converted versions of the recordings it copied, without authorisation, from copyrighted CDs.
Damages in the case will be determined at a trial to begin on August 28th.