A day after The Federal Trade Commission unconditionally approved the merger of Sony Music with Bertelsmann's BMG, Bertelsmann appears to be in trouble for a brief fraternization with the competition.
In 2000, Bertelsmann struck a partnership with Napster – a then illegal incarnation – to keep it alive in the hope of converting it to a legal venue for online music sales. Bertelsmann is accused of lending Napster more than $85 million over two years to deliberately prolong Napster's ability to traffic millions of illegally copied tunes.
BusinessWeek points out that at the same time, the company was suing along with others to put Napster out of business.
The media company is now being forced to defend itself against two lawsuits seeking $17 billion in damages.
Companies bringing the lawsuits against Bertlesmann include EMI Group PLC and Universal Music Group. They claim that Bertelsmann flouted copyright law.
Bertelsmann strongly denies liability. Bertelsmann general counsel Ulrich Koch said: "The facts simply do not support the allegations of control on Bertelsmann's part."