The case concerned unauthorized duplication by the company MP3.com of songs from a wide selection of compact discs for the purposes of launching a service that allowed users to access their private music collections online from anywhere in the world.

Despite this process, the record companies argued that MP3.com had made few efforts to ensure that the songs being uploaded by its users had in fact been legitimately purchased in CD form.

MP3.com also accused the record companies of copyright misuse by filing a lawsuit for purposes of revenge, while its subscribers were simply engaged in space shifting – consuming their purchased media in different environments – which had been upheld by several Supreme Court precedents.

[1] As stated by Judge Jed S. Rakoff in his opinion: “The complex marvels of cyberspatial communication may create difficult legal issues, but not in this case.” Rakoff rejected arguments by MP3.com that its service merely allowed listeners to practice space shifting, stating that "stripped to its essence, defendant's 'consumer protection' argument amounts to nothing more than a bold claim that defendant should be able to misappropriate plaintiff's property simply because there is a consumer demand for it.

"[1] Rakoff also ruled that given recent advances in computing technology and the playback devices used by the typical music consumer, an MP3 file was not substantially different in quality from a compact disc, so a ripped file does not qualify as transformative use under copyright law, while MP3.com's claim that it was protecting or enhancing the music industry was rejected because the service infringed on the companies' distribution rights.