On April 13, 2000, Metallica filed a lawsuit against the file-sharing company "Napster". Metallica alleged that Napster was guilty of copyright infringement and racketeering, as defined by the Racketeer Influenced and Corrupt Organizations Act (United States Federal Law). The lawsuit was filed in the U.S. District Court for the Northern District of California. This case came after another case that was filed against Napster, by A&M Records, Inc. which included 18 large record companies. But Metallica's lawsuit was the most publicized since it was an artist suing a Peer to Peer company. Lars Ulrich was the face of Metallica in that lawsuit, and we all know his verbal ways. His appearance on the media made it looks like Metallica is on a crusade against their fans, trying to hunt down the "criminals".
For those who do not know this, Napster was a pioneering peer-to-peefile-sharingng Internet service, founded by Shawn Fanning, that emphasized sharing digitally encoded music as MP3 audio files.
Using Napster people around the world could share their music collection with others, the same as you exchanged CDs with your neighbor.
It started when Metallica heard their unfinished, unmixed demo of the song "I Disappear", which was part of the Mission: Impossible II soundtrack, on the radio stations across the US. Metallica hired an investigation company and traced the leak to the file on Napster's peer-to-peer file-sharing network, where they discovered the band's entire catalog was available for free download. Metallica argued that Napster was enabling users to exchange copyrighted MP3 files. So they said "You fuck with us, we will fuck with you" and what started as a "street fight" according to Lars's words, became a huge fiasco.
In March 2001, the federal district court issued a preliminary injunction in Metallica's favor. The injunction ordered Napster to place a filter on their software within 72 hours, or be shut down. Napster was forced to search its system and remove all copyrighted songs by Metallica.
Other artists including Dr. Dre, several record companies, and the RIAA subsequently filed their lawsuits which led to the termination of an additional 230,142 Napster accounts.
Napster settled with Metallica and Dr. Dre after Bertelsmann AG BMG became interested in purchasing the rights to Napster for $94 million.
Although Metallica won the case, they lost many of their fans. The case became one of Metallica's black stains in its history. It also impacted the peer-to-peer which dramatically dropped down for a while, but eventually came back up stronger the bigger. There was much more software available and more people got involved. It was even claimed that users which download music for free spend more money on purchasing music since they can expose themselves and taste more variations.