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It sucks to be Grooveshark right now. Universal Music recently filed a lawsuit alleging that Grooveshark’s employees illegally upload hundreds of thousands of copyrighted songs to the service to boost its usefulness. Universal Music produced emails from Grooveshark’s CEO in which he basically admitted that they were growing a tremendous user base “without paying a dime to any of the labels” – which doesn’t prove employees upload songs, but could throw a big dent in Grooveshark’s DMCA Safe Harbor claims. Oh yeah, as if that wasn’t bad enough, the emails apparently pissed off Sony and Warner, too, and now they’re likely gearing up to sue Grooveshark, too.
The news comes courtesy of the New York Times, who spoke to four people with knowledge of Sony and Warner’s plans. The lawsuits are expected to be filed by Thursday. Grooveshark released the following statement when presented with the info:
We respect the intellectual property of all artists, and our strict policies are designed to ensure that our users only upload content to which they are entitled. This is a policy which we vigorously enforce within D.M.C.A. requirements.
However, a refresher course from our article about Grooveshark’s CEO’s emails is in order: in order to qualify for the Safe Harbor provision, a service provider can’t profit from or even knowingly host infringing material, and it must take down violations it knows of. The following quote from one of CEO Sina Simantob’s emails puts all three of those requirements into doubt with Grooveshark – a fact that Sony and Warner probably took into consideration.
In our case, we use the label's songs till we get a 100 (million) uniques (visitors), by which time we can tell the labels who is listening to their music, where, and then turn around and charge them for the very data we got from them, ensuring that what we pay them in total for streaming is less than what they pay us for data mining. Let's keep this (quiet) for as long as we can.
Did Grooveshark bit off more than it can chew with this one, or do you think the company's TOS and flagging systems will actually earn it Safe Harbor in the eyes of the court?