Grooveshark Is Now Facing $17 Billion In Damages…

Grooveshark had better hope their defense stands up in court. According to court documents obtained by Digital Music News early this morning, the latest lawsuit from Universal Music Group would saddle Grooveshark and its executives with more than $17 billion in damages if proven correct.  And, just like the Limewire case, that likely includes punishing personal liabilities against top Grooveshark employees.

The complaint, filed in the US District Court in Manhattan, can be found here.

The following is a list of specific Grooveshark executives and employees accused of personally uploading unauthorized tracks into the Grooveshark system.  On the aggregate, UMG accuses the defendants of uploading 113,777 songs.

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The math gets pretty outrageous, pretty quickly.  Universal is seeking $150,000 per infringement, pushing the liability to roughly $17.1 billion.

But wait: Grooveshark is now denying all charges, particularly a reference to an anonymous comment in Digital Music News.  That comment, allegedly from a Grooveshark employee, claims that the company actively and routinely uploads files.  The comment – and the article to which it is attached – comprise a substantial chunk of the court complaint.

Grooveshark says it’s all a fabrication.  “Universal’s claims rest almost entirely on an anonymous, blatantly false internet blog comment and Universal’s gross mischaracterization of information that Grooveshark itself provided to Universal,” Grooveshark general counsel Marshall Custer told us.

“While Universal has deliberately engaged the media prior to serving a copy of the Complaint on Grooveshark, Grooveshark intends to fight this battle before the Court, not in the press.  Grooveshark welcomes the opportunity to present the facts to the Court and has full confidence that it will prevail in the litigation.”

This is the comment in question, posted last month as part of this story.

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43 Responses

  1. Bryan

    But the filing also apparently contains evidence that Geller himself, CEO Sam Tarantino, and VP Ben Westermann-Clark have personally uploaded thousands of songs into the Grooveshark database, an unequivocally clear move outside of DMCA safe harbor protections” If UMG has evidence of this, then their case does not rest on a blatantly false Internet blog comment. If you even think it about logically, there is no way the lawyers at UMG let their case rest on a blog comment. If you do a Cost-Benefit analysis for UMG, then you would have to conclude they have strong evidence.

  2. Rastamouse

    if you sit by the river long enough, you’ll see the bodies of your enemies float by

  3. Yves Villeneuve

    UMG should seek a court injunction in the meantime. I don’t understand why they don’t do this unless they feel it will reduce the need for SOPA and Protect-IP.

    Legal due process is necessary to shut down a website. SOPA and Protect-IP will be amended and the labels should not be asking for unreasonable demands in legislation.

  4. Michael Robertson

    I encourage everyone to be CRITICAL readers. The last decade has shown that record labels will say anything in a lawsuit to try to make their case and many many times it proves out to be completely false.
    Two recent examples are Youtube and MP3tunes cases. In both of those cases major record labels disparaged executives of those companies alleging they engaged in acts which would invalidate their DMCA defenses. In both of those cases the court found otherwise.
    So here we are again with UMG using an anonymous blog post as a central piece of their “evidence”. I can’t think of anything more flimsy. They have tens of thousands of documents from Grooveshark already because they have an ongoing lawsuit with them. If this activity was so widespread we would see many official documents instead of unsubstantiated anonymous writings on a blog.
    I’m disappointed that Digital Music News isn’t more skeptical of these claims or at least objective. Given the historical context a great deal of skepticism is warranted.

    • oh yeah

      Information wants to be free. I want to see the Grooveshark accounting books on a torrent. You disagree?

  5. Worldslump

    So – as the one ‘Fat Corporate’ said to the other ‘Fat Corporate’ – “so sue me” … and lots of lawyers got richer, and the ‘Fat Corporates’ carried on drawing their excessive pay checks … and when they finally settle on some billions in ‘compensation’ – please tell me – what percentage goes to the musicians who had produced the music in the first place?
    Not a lot would be my guess.
    Perhaps we (musicians) should model the music world on the (high-end) art world. You make just ONE physical Album and sell it like you would a picture. It goes from auction-to-auction gradually increasing in value if you become ‘known’. You might make limited edition reproductions, but they would be the inferior mp3 versions.
    Your contract/rights protection would state that you get say, 10% of the proceeds from all auctions in perpetuity.

    • gaetano


      And then the .JPG and the Scanner and the printer were invented and it got a little different…

      Just sayin…

      • gaetano

        You know what Dave, you deserve more than that comment.
        So, the equivalent of that “masterpiece” going from auction to auction in a music equivalent, is that a master tape? (which in this day in age is an audio file…most likely a mastered AIFF or WAV).
        Or is it an actual live performance??
        If it’s the former, there would have to be a way to turn that digital file into a product of some sort…maybe a record? And then it could be taken from auction to auction by maybe a dj, until people deemed it worth something? Funny thing is, that used to happen within electronic music, it was called dubplate culture and it created a lot of buzz and hype and vaue around a tune. It also pretty much died when file sharing happened. It turns out humans don’t covet binary code as much as you’d think and the nature of the file lends itself to transferring very easily.
        Funnily enough, there are apps now that allow you to rip audio right off your computer, and will even pop them into your music player of choice, effectively turning any streaming service into a owning service.
        Is the quality inferior? You’ll have to ask all the people who don’t care…there are a lot of them.
        In regards to a performance, owning a piece of art like that is closer to paying Beyonce to play your birthday or kids Bar Mitzvah (which happens).

  6. @thornybleeder

    Brian Thompson
    And now, in the utterly ridiculous department…

  7. STOP IT!

    WTF, UMG?

    You are all literally swiming in millions. Why do you need some more? Why is everything you do dictated by what your lawyers have to say? Do you ask for their permission to breath or wake up in the morning?

    Just because someone spoke up and said something in public, doesn’t mean you have the right to put all our lives in danger. Use the information to make your business better. Don’t use it against other people. Don’t use it as a fucking weapon.

    Please stop this madness. NOW.

    Current Grooveshark employees and partners are receiving threats. Some asshole called my mother at home last night. You are seriously endagering people who are just trying to make a living. We won’t ever see the money the big heads are making.

    Seriously. What the fuck is wrong with you people? Get over “piracy” and find alternative ways to make money. You don’t understand what kind of nest you are messing with. If something happens to someone, the world will know it was UMG’s fault.

    • Visitor

      You idiot
      “Get over “piracy” and find alternative ways to make money”
      How about ‘get over pirating and find alternative ways to make money’ Hmm?

    • K

      So, now Grooveshark threatens employees to keep their mouth shut? How classy. How glamorous.

      • Visitor

        ‘Shark’ means ‘shark’
        How can someone swim in the ocean full of sharks and not to know about it? If someone so called an artist wants to make some extra money, he/she needs to mess about by submitting his/her copyrighted material to too many major companies on different terms and find out about the gaps in policies. Easy!

  8. A Carroway

    Isn’t this $17 billion way overstated?

    Sure there are more than 100K tracks mentioned in the suit, but according to the court documents only roughly 1,800 are mentioned as being specifically from the UMG catalog.

    And since UMG are the only ones to take a lawsuit that is MUCH less than $17 billion, much much much less 🙂

    • JacksonL

      Universal IS every major label
      let me explain. they (UMG) goes in, wins the case. Then the RIAA files a suit for all the majors or goes direct for their money in a settlement.

  9. James

    Great news. Thanks to the UMG legal team for fighting the mafia behind the Grooveshark logo. Enough with the vultures.

  10. Previous:

    King Crimson Can’t Get Their Music Off of Grooveshark. So They cc’d Digital Music News…

    This Morning, Grooveshark Sent Us This Angry Email…

    Grooveshark Whistleblower Provokes Another Universal Music Group Lawsuit…

  11. Twitter much

    Funny how Sam Tarantino and company are all tied up in public on Twitter with the crooks behind other piracy sites, in and out of the US. They don’t even take precautions.

    • too risky

      If I was involved, I would give an call to the local FBI office and ask ifor a discrete meeting to be arranged. Their agents are better at this than anyone else in this country. You would be surprised at how well they can fit in at any undercover situation.

      • good adv

        Yes, the best move would be to talk to FBI first. UMG can’t offer anyone protection. It is a record label. Yes, it has a good team of laywers, but laywers don’t protect witnesses. That’s the FBI’s job.

    • Maxwellian

      My advice: dump it right here as anonymous. Do it at a kinko’s or something, pay in cash, walk out.

  12. Spoken X Digital Media Group

    We had no idea , GrooveShark , had developed a culture of despising the independent artist /label and considering them the enemy. But at the same token both, they create a busness model –application around the sweat and dreams of those very same considered foes. Today we are very sad to be a label partner with GrooveShark. . .

    • let me ask you

      The question is, why are you *still* a partner with Grooveshark, after all this shit?

      • Spoken X Digital Media Group

        Groove shark claims they have taken a license from Spoken X Digital Media Group. . .When you take a license from us then you’re a partner for life until you balance our books!

    • steveh

      OMG “Spoken X Digital Media Group” you are so conflicted!
      Should you perhaps take medical advice (for schizophrenia)?
      How on earth can you remain a “label partner” with Grooveshark?
      What is this “business model” of which ye speak?

      • Spoken X Digital Media Group

        I don’t need any medical advice my friend. Grooveshark has my label #713 on their 850 label/partner list. But to this day I never recieved any communication or accounting for my label assets. And so the partnership cannot be de-leveraged until I get restitution for my damages. . .

        • Spoken X Digital Media Group

          Just to answer your question about the business model that I speak of. I don’t know what Grooveshark business model is; but Spoken X Digital Media Group’s business model is the monopolization of all exclusive rights of in-house manufactured products. And when you exploit those products you need to take a license from my Harry Fox Top Publisher account. . .As well as come direct to me for Master Rights usage negotiation. . .–agreement. . .

  13. Visitor

    No offence Spoken X, but you demonstrate quite how important label licenses are to grooveshark when you are one of the 850 that they loudly exclaim partnering with, yet apparently have no content and have never had any contact with nor payment from them.

    • Spoken X Digital Media Group

      Point well taken; but they had the content. But after the delivery years ago–no communication , forward accounting or license acquisition before or after the exploitation– Thanks for understanding. . .

      • Surprise, surprise

        You don’t even have a working .com
        It seems Grooveshark has swallowed your brain.

  14. Papa Bear

    I run a indie label. I work with music because I love it and I do myself upload my releases to Grooveshark since it’s a good way to spread the word for small labels like me in countries that don’t have Spotify for instance.
    One of my acts, MÄRVEL, had a good release in Sweden in April and got good rotation on national radio. That lead to 270.000 plays on Spotiify that paid me and the band 3.200 SEK (about 350€). And people PAY to use Spotify with no commercials.
    I’d rather just give away the music for free rather then having that thrown in my face. Looking at the production cost for an album, lets say a couple of thousand cd’s, recording, master cost, some promotion, a cheap video etc that amount to what… 50-100.000 SEK. That means we must get 4-8 million plays to reach break even on a low budget release.
    So for all that I care, keep sharing the love. No cash or almost no cash won’t make a difference.
    Papa Bear
    Killer Cobra Records

    • steveh

      Interesting to read some Spotify scepticism from Sweden, their home territory.
      Translating euros to US dollars your total of 270,000 streams for 350€ makes a per stream payout of 0.175 US cents.
      There is no conceivable way that a label like yours can recoup a 10,000€ spend on making and marketing an album from Spotify income – let alone a 50,000€ or a 100,000€ spend.
      Spotify is an insane Ponzi scheme, exploiting our music to further a megalomaniac tech startup-company agenda.
      People have often accused Apple of having an agenda with iTunes that is based around selling Apple products – but the deal Apple gives labels and artists is pretty fair, and the income it delivers in territories where it is strong (NB. not Sweden) is good.

  15. !!!!

    There is so much hipocrisy in this, I don’t even know where to start. The worst culprit of this whole thing is not grooveshark but Universal Group. To be quite honest, I don’t get how can they have the cheek to accuse anyone of infringement and piracy, when its labels like Universal that are the biggest sharks, who exploit musicians the most. As a musician I can say that I DON’T care if grooveshark is uploading my bands music and giving it away for free. Why? Because I don’t see any of that money anyway, its all pretty much going to the label (despite the fact we write it all ourselves), so I can sacrifice the pennies I get, just so that these thiefs can get screwed over more.

  16. !!!!

    There is so much hipocrisy in this, I don’t even know where to start. The worst culprit of this whole thing is not grooveshark but Universal Group. To be quite honest, I don’t get how can they have the cheek to accuse anyone of infringement and piracy, when its labels like Universal that are the biggest sharks, who exploit musicians the most. As a musician I can say that I DON’T care if grooveshark is uploading my bands music and giving it away for free. Why? Because I don’t see any of that money anyway, its all pretty much going to the label (despite the fact we write it all ourselves), so I can sacrifice the pennies I get, just so that these thiefs can get screwed over more.

    I’m glad piracy exists, I wouldn’t be saying this 20 years ago, but I hope that it will result in destroying scum like Universal, because thats all they deserve. Its disgusting. They are worse than bankers.