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Founded in 1999, Napster was a P2P service that let its users share MP3 files without restrictions. It was developed by Shawn Fanning, then-19, when he was at University. It quickly became popular for music sharing, with millions (80 million at peak) of MP3 files available for download from other Napster users.
The network became a source of massive copyright infringement, as people ripped their own music CDs and shared them with every other Napster user that wished to download them.
Rock band Metallica filed a lawsuit against Napster in 2000 after the band discovered its entire discography, along with an unreleased track called "I Disappear," were available to download easily through Napster. Rapper and producer Dr Dre followed Metallica's lead and sued Napster after the service refused to stop his music from being shared on the network.
Then, the Recording Industry Association of America (RIAA), representing major record labels, sued Napster alleging that it was liable for the copyright infringement of its users. The case went to court and Napster ultimately lost the case. After it was ordered to filter out infringing material, Napster accepted that it could not technically stop users from infringing copyright and shut down in July 2001. It also settled the cases with Metallica and Dr Dre.
Napster, in its early P2P form, also had some supporters among artists, such as Chuck D from Public Enemy.
After shutting down, Napster announced that it would sell off its assets to German group, Bertelsmann, for $85 million, but a U.S. judge eventually blocked the sale and ordered Napster to file for bankruptcy.
Napster resurrected later as a legal music service, offering a music subscription service to users, under the management of Roxio. In 2008, U.S. Retailer Best Buy paid $121 million to buy out Napster, but in December 2011, Napsters subscribers and other assets were transferred to Rhapsody for an undisclosed sum.
Napster's demise as a P2P service left a demand that was eventually filled by a number of other popular networks, such as the eDonkey2000 network, FastTrack (used by Kazaa) and Gnutella.