A federal judge in New York said late Monday that free music streaming service Grooveshark has infringed on thousands of major label copyrights.

The record labels have for years sought ways of taking the groove out of Grooveshark, and they may have finally managed it.

Gainesville, Florida-based Grooveshark has long hidden from infringement allegations behind the Digital Millennium Copyright Act, which says websites can not be held liable for hosting copyrighted materials as long as they provide copyright holders a mechanism for removing infringing material.

But Judge Thomas P. Griesa of United States District Court in Manhattan pointed out that the employees and principals of Grooveshark had themselves uploaded almost six thousand copyrighted music files and even sought to destroy evidence that they had done so.

“Each time Escape [Media Group, which owns Grooveshark] streamed one of plaintiffs’ songs recordings, it directly infringed upon plaintiffs’ exclusive performance rights,” Judge Griesa wrote in his opinion.

In the next phase of the trial, the court will establish damages. Based on awards in similar cases in the past, the penalties may be large enough to put Grooveshark out of business.

Grooveshark’s lawyer said he and his client are “disappointed” with the court’s decision and are contemplating an appeal.

Meanwhile, Grooveshark is being sued by record labels in two other courts: New York state court and another New York federal court.

Grooveshark was founded in 2006 and claimed it had 35 million users by 2011.

Via: NYT