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Compromise Expected in MP3 Suit

NEWSDAY

The future of trading music over the Internet, an incendiary issue that’s enriched lawyers and cocktail-party conversations, even as it has polarized music fans and some artists -- will likely be a compromise, and the losers today could be winners tomorrow, some experts suggested Thursday.

The speculation comes in the wake of Wednesday’s ruling by a federal court judge that online music service MP3.com willfully violated copyright laws by making thousands of compact discs available for listening over the Internet. The ruling makes the site liable for fines that could reach as high as $250 million, although MP3.com has vowed to appeal.

Some experts, however, say that no matter how the case ends after months of appeals, MP3.com will probably end up working closely in the not-too-distant future with the same recording industry firms that brought the lawsuit against them.

That partnership could, they said, include so-called “middle ground” options for digital distribution of music that employs new economic models for the recording industry that could involve direct sales through the site, subscriptions or forms of both.

Howard King, a Los Angeles attorney who represents the rock band Metallica in a pending suit against file-swapping service Napster, said the litigation against these services is not about putting them out of business. Instead, he said, “I think the record labels are desperately looking for some space to create their own way to control digital distribution of music.”

German Leader Takes Blows As Euro Hits Record Low

LOS ANGELES TIMES -- BERLIN

German Chancellor Gerhard Schroeder’s not-to-worry attitude toward Europe’s plummeting common currency not only sent the euro to another record low Thursday but exposed the German leader to a barrage of criticism that he is making a bad situation worse.

Schroeder’s observation earlier this week that a weak euro boosts German exports by making goods cheaper in the important U.S. market served to undermine financial officials’ calls for strengthening the currency to forestall inflation and rising interest rates.

The European Central Bank has already raised lending rates six times since November in a futile bid to stop the euro’s plunge. The tightening of credit threatens to repress growth prospects in the euro zone.

The weakened euro is particularly damaging because of the surging worldwide price of oil, which is traded universally in dollars. That makes energy costs even worse for Europeans.

Gasoline costs upwards of $4 per gallon in Germany and France, and inflation among the 11 countries using the euro has grown to 2.4 percent -- above the community’s self-imposed limit of 2 percent.