A federal judge has thrown out a lawsuit filed by popular file sharing site Lime Wire against a group of major music labels.

The peer-to-peer (P2P) site had claimed that it had been harmed by the action of these record labels and filed an antitrust suit.

However, the Associated Press (AP) has reported that District Judge Gerard E Lynch ruled in New York on Monday (December 3rd) that Lime Wire's claims "fail to allege an adverse effect on competition market-wide".

More rumors are surfacing around Amazon offering DRM-free MP3s to compete with Apple's iTunes. Only this time the rumors include other MP3 download services and are coming from the mainstream press (does that make it more or less credible?). Looks like certain key executives have converted to the idea that digital downloads should be sold as unprotected MP3s.