As Napster did in pioneering the peer-to-peer game, Grooveshark has done the same for free music streaming, relying on user-generated content to circumvent label licensing. As a result, Grooveshark is now facing a lawsuit from Universal Music Group for illegally uploading 1,971 tracks at a penalty of $150,000 each.
The company’s CEO is specifically being held accountable for the uploads, which at the very least, is an improvement from the RIAA’s previous methods of pursuing legal action against users. However, because a free service like Grooveshark certainly can't afford a settlement nearing the billions, the service could very well shut down if UMG wins out. Though there could be a silver lining for Grooveshark: because its service is essentially a free storage locker that doesn’t allow downloading, the same copyright laws that shut down Napster and The Pirate Bay might not apply.