Recording Industry Reaches Pact With File-Sharing Site Audiogalaxy.com

The recording industry knocked another online file-sharing site out of the piracy business Monday when Audiogalaxy.com agreed to limit its network to songs that labels, artists and songwriters had approved for sharing.

The agreement brings a quick end to a copyright-infringement lawsuit the major record labels and music publishers filed last month against the Austin, Texas-based online music company. The settlement also calls for Audiogalaxy to pay labels and publishers an undisclosed but substantial sum.

Audiogalaxy tried to keep its users from downloading some copyrighted songs from one another’s computers, but its efforts weren’t effective enough for the labels and publishers. Under the settlement, Audiogalaxy will be able to continue linking users to songs authorized for downloading by their copyright holders, as it has been doing for a number of independent labels and bands.

The labels had pushed for this kind of limitation on Napster Inc. of Redwood City, Calif., as well, but the courts stopped short of requiring that all files be pre-approved. Instead, U.S. District Judge Marilyn Hall Patel required Napster to take all technically feasible steps to prevent piracy--a requirement so strict that the company shut down its free service. It has since declared bankruptcy, though it plans to reemerge as a subsidiary of media conglomerate Bertelsmann.

Officials from Audiogalaxy could not be reached for comment.