Recording Industry Association of America sues Napster in federal court in San Francisco alleging copyright infringement. Heavy metal rock group Metallica sues Napster for copyright infringement and racketeering. Rapper Dr. Dre files suit two weeks later. Metallica drummer Lars Ulrich and the band's attorney produce list of more than 335,000 Internet user names of people the band says are illegally sharing their songs using Napster. Napster shut down.
Appeals court hears oral arguments.
Napster announces partnership with German media giant Bertelsmann AG to develop a membership-based distribution system that would guarantee payments to artists. Under the deal, Bertelsmann agrees to drop lawsuit against Napster and make its music catalog available to Napster, while gaining the right to buy a stake in the service. 9th Circuit rules Napster must stop trading in copyrighted material. Alone among the major music labels, only BMG Entertainment is supportive of Napster's proposal. The unit of German media conglomerate Bertelsmann has allied itself with Napster, loaning it money and technical expertise as the company tries to make good on a promise to develop by this summer a secure, fee-based system that will compensate artists for their work.