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Thomas Middelhoff told a German newspaper this month that he was willing to pay $15 million-$30 million, in addition to the $85 million that his company has already lent Napster over the last few years.
BERTIE-NAPSTER DEAL
SPARKS CONCERN
Would Regulatory Investigate a
Napster Purchase?
You can file this one under wacky.

By pursuing a possible deal to buy Napster, Bertelsmann is opening the unusual possibility that it may be financing an antitrust investigation against itself.

According to the New York Times, the deal to buy Napster is being spearheaded by Bertelsmann chief Thomas Middelhoff, who told a German newspaper this month that he was willing to pay $15 million-$30 million, in addition to the $85 million that his company has already lent Napster over the last few years. He said he believed a for-pay version of Napster could still become the Internet's most successful service.

At the same time, BMG has joined four other record labels in pursuing a lawsuit against Napster for copyright infringement. That suit succeeded in knocking the service off the Internet last July.

Napster, in turn, has said the case against it should be thrown out because the record companies had engaged in antitrust activities, joining to thwart competition to their own Internet music services. A judge has given Napster permission to gather evidence from the record companies for its claims.

So if Bertelsmann buys Napster, it will have two of its divisions on opposite sides of a serious legal divide, with billions of dollars in damages at stake, the Times said. As Bertelsmann is only one of a number of plaintiffs seeking damages from Napster, it could not on its own simply drop the suit.

Adding another wrinkle, the Justice Department said in October that it had started an antitrust investigation of its own into whether the record companies have misused their copyrights to dominate the digital market. Legal experts said that government investigators could have additional ammunition if Bertelsmann buys Napster and then shuts down the service's antitrust investigation.

Napster's very existence could depend on the company being acquired. People close to the company say that without receiving a new capital infusion — from Bertelsmann or elsewhere — it could exhaust its money in the next two months.

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