The initial CDDB license was GNU General Public License, and many people who submitted CD information without charging anybody and thinking their help would remain free. However the license was later changed and some programmers complained that the new licence included certain terms that threatened them in a way they couldn't accept: If you want to access CDDB, you are not allowed to access any other CDDB-like database (such as FreeDB) and - while accessing the database - the programmer has to ensure, that a CDDB-logo is displayed.
In March 2001, CDDB, now owned by Gracenote, banned all unlicensed applications from accessing their database. New licenses for CDDB1 (the original version of CDDB) were not available anymore, as they wanted to force programmers to switch to CDDB2 (a new version incompatible with CDDB1 and hence with FreeDB).
The licence change motivated a new project, FreeDB, which is intended to remain free.
An alternative project that aims to enhance CDDB beyond a mere database of CDs is called MusicBrainz. This site also contains more information on CDDB and some database statistics of CDDB and FreeDB.