By Andrew Edgecliffe-Johnson in London and Joshua Chaffin in New York
Bertelsmann, the German media group, may have to book another $200m (€147m) of costs after settling the last of the litigation stemming from its support for the original Napster, the music file-sharing website.
The industry has yet to recover from the piracy that was spurred by Napster in its original form.
A $130m settlement on Friday with the National Music Publishers Association brought the Napster claims to a close four and a half years after the first $17bn lawsuit was launched over the German media group's loans to Napster.
The settlement means the Napster litigation has been settled for a total of about $400m. Since last summer, the company has settled with Universal Music for $60m, Warner Music for $110m, and EMI for an undisclosed sum thought to be close to $100m.
Although the final settlement is well below original estimates of the potential liability, it is about $200m more than the sum Bertelsmann had set aside to cover payments.
The German group, due to report half-year figures Tuesday, is likely to have to recognise the difference in this year's accounts.
In its last annual report, Bertelsmann noted an expense of €48m for the Universal settlement and set aside a provision of €101m for possible future settlements. However, those settlements have since amounted to close to $340m.
The provisions in the last annual report are thought to have been calculated on the basis of what its liability would be if other music companies settled on similar terms to Universal, adjusted for their different market shares. Bertelsmann declined to comment.
Higher provision in prior years' accounts could have encouraged larger claims.
Bruce Rich, the Weil Gotshal & Manges partner who acted as Bertelsmann's counsel on the Napster litigation, said: "There had been four litigations. The last of them was with this class of music publishers and that has now been settled. The company is pleased to put this last piece of the litigation behind it."
The original lawsuits alleged that Bertelsmann had prolonged Napster's life by helping fund it before its 2002 collapse. Bertelsmann argued its aim had always been to help Napster establish a licensed service. Napster was later relaunched with a new business model, signing content agreements with record companies and independents.
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