Grooveshark, the once-popular free music streaming service, has admitted defeat. In a victory for the major record labels that accused the site of copyright violations, the site has shut itself down.
The service conceded, in a letter posted on its website, that it "made very serious mistakes" and "failed to secure licenses from right holders for the vast amount of music on the service."
"That was wrong. We apologize. Without reservation," the company said.
As part of a settlement agreement with the major music companies (Universal Music Group, Sony Music Entertainment and Warner Music Group), Grooveshark agreed to cease operations, wipe its computer services of the record companies' music and hand over ownership of its website and mobile apps.
Escape Media, Grooveshark's parent company, agreed to significant financial penalties if the terms of the settlement are violated, according to the Recording Industry Assn. of America, the industry group that represents the major labels.
"This is an important victory for artists and the entire music industry," the RIAA said in a statement. "For too long, Grooveshark built its business without properly compensating the artists, songwriters and everyone else who makes great music possible. This settlement ends a major source of infringing activity."
Grooveshark was founded nearly a decade ago by Josh Greenberg and Sam Tarantino. The settlement comes shortly after a U.S. district judge ruled that the company could have to pay up to $736 million in damages.
In its statement, Grooveshark noted that there are many services that now offer legal, licensed ways to stream music online, including Spotify, Beats Music and Rdio, and encouraged its users to switch to those on-demand options.