Unlicensed: Are Google Music and Amazon Cloud Player illegal?

Amazon.com made waves in March when it announced Cloud Player, a new "cloud music" service that allows users to upload their music collections for personal use. It did so without a license agreement, and the major music labels were not amused. Sony Music said it was keeping its "legal options open" as it pressured Amazon to pay up.
In the following weeks, two more companies announced music services of their own. Google, which has long had a frosty relationship with the labels, followed Amazon's lead; Google Music Beta was announced without the Big Four on board (read our first impressions). But Apple has been negotiating licenses so it can operate iCloud with the labels' blessing.
The different strategies pursued by these firms presents a puzzle. Either Apple wasted millions of dollars on licenses it doesn't need, or Amazon and Google are vulnerable to massive copyright lawsuits. All three are sophisticated firms that employ a small army of lawyers, so it's a bit surprising that they reached such divergent assessments of what the law requires.
So how did it happen? And who's right...?

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Timothy B. Lee @'ars technica'