On Friday, the judge in the Napster case made it clear she was unhappy with the record industry for the way it has handled its own online music web sites. The labels have sought to impose anti-competitive licensing terms with online rivals and created sweetheart deals with each other for their own online joint ventures. Various court challenges are pending, but none have had any teeth until Judge Patel’s order on Friday made it clear that she was more than willing to open up the Napster case to include the record industry’s antitrust problems. Here’s an article with more details from the order.

Although settlement talks with Napster had been going nowhere, you can now expect the record industry to sit down relatively quickly and cut a deal with Napster to keep this from gaining any momentum.

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