MP3 Tunes files for bankruptcy

June 2012

Internet, record labels

MP3tunes, the cloud locker music service that has been engaged in a long and costly lawsuit with EMI, has filed for bankruptcy in federal court in San Diego. In court papers, it listed $7,800 in assets and $2.1 million in liabilities. MP3tunes was founded by Michael Robertson, the web entrepreneur who in the 1990s was one of the first to turn digital music into a big business, with

Last year, the Southern District of New York District Court held that the MP3tunes’ model did not violate copyright itself and was protected by the ‘safe harbour’ provisions of the DCMA – but the company, a number of executives and Mr. Robertson personally faced liability for individual songs uploaded without permission and for ‘contributory infringement’. EMI appealed the ruling, and hearings were scheduled to begin next week.

In a statement, an EMI spokesman noted that despite the bankruptcy, Mr. Robertson was still a defendant in the case – a potentially damaging claim as EMI have alleged Robertson personally loaded infringing material onto the service.

Robertson told C-Net: “Four and a half years of legal costs and we’re not even out of trial. MP3tunes has no choice but to file [for bankruptcy]… this is what they do. The labels engage in multi-year legal battles and put small companies through hell for years. EMI went to other companies and demanded that they not work with us. They went to retailers, as one example, and forbid those guys to work with us”.

Meanwhile, according to Music Void, the chief added: “At every opportunity EMI dragged out the legal process, making it costly and burdensome. One example is the interrogation of company employees in all-day inquisitions called depositions, where attorneys try to trick people into making admissions. In our case, they deposed not just management but nearly everyone in the company, all the way down to clerical help and customer support personnel. They even paid $25,000 to get an ex-employee to agree to a deposition. From management they deposed everyone – some multiple times – with me getting deposed three separate times”.

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