📑 CMU Digest: Music industry lambasts Anthropic’s defence + Spotify lays into Apple (again)

CMU Digest is a weekly round-up of the most interesting music business news stories from the last seven days. 

This week: Various music industry trade groups have accused AI company Anthropic of employing “tired and rejected arguments” in its legal battle with the music publishers. TikTok continues to navigate regulator concerns, with various groups in the US speaking out in support of the sell-or-be-banned law, while in the EU the short form video app has agreed to permanently withdraw a rewards scheme that officials had criticised. The major labels have hit back at the latest attempt by ISP Cox Communications to overturn a big copyright judgement. Spotify says that Apple’s newly revised rules around in-app payments still violate EU law. And three Taylor Swift shows in Vienna were cancelled following a terrorist plot. 

ICMYI: Pitbull accused of song-theft; UK creator groups write to AI companies; Finnish government criticised over private copy cuts; movie and gaming industries say new digital replica right shouldn’t be too wide-ranging; Viagogo stages PR push amid UK government plan for resale price-cap; Warner Music restructure; majors v Suno and Udio. 

Industry accuses Anthropic of relying on “tired and rejected arguments”

US music industry organisations filed an amicus brief with the court that is overseeing the legal battle between various music publishers and AI company Anthropic. The publishers say that Anthropic infringed their copyrights by using lyrics when training chatbot Claude without getting permission. Anthropic insists that training AI constitutes fair use under American copyright law so no permission is required.  

Groups representing artists, songwriters, record labels and publishers strongly refute the fair use argument in the new court filing. They also hit back at suggestions that expecting Anthropic to license content for training will threaten technological progress. They write that the “false choice” presented by the AI company “between compliance with copyright law and technological progress is a well-worn, losing policy argument previously made by other mass infringers such as Napster and Grokster in their heyday”.

TikTok continues to deal with critics in US and EU 

Congress members, state attorneys general, human rights organisations, free speech experts and former national security officials all made court submissions supporting the TikTok-targeting sell-or-be-banned law in the US. TikTok is challenging the law, passed earlier this year, which orders its China-based owner ByteDance to sell the app or face a US-wide ban. 

The law seeks to address concerns that the Chinese government has access to US TikTok user-data via ByteDance. TikTok insists there are no data security issues and argues that the US government hasn’t provided evidence to back up those concerns. But nineteen former national security officials backed a submission to the court that said there are “grave national security threats posed by Chinese control of TikTok”. TikTok also argues that banning the app would breach US free speech protections, but experts told the court that the ban prevents “conduct” not “expression”, so free speech arguments are irrelevant.

In the EU, TikTok agreed to permanently withdraw a rewards programme from the Lite version of its app within Europe. The scheme rewards users for watching videos. EU officials raised concerns about the addictive effect of the scheme and began formal proceedings against TikTok in April. They welcomed TikTok’s decision to withdraw the scheme and made that commitment legally binding.

Majors hit back at Cox attempt to overturn copyright ruling

The major labels hit back at the latest attempt by US internet service provider Cox Communications to overturn the 2019 billion dollar judgement that held it liable for its users’ copyright infringement. The ISP claims the majors mishandled key evidence when the legal dispute was in court and therefore there are grounds to overturn the judgement, citing Rule 60 of the US Federal Rules Of Civil Procedure.

The copyright infringement claim related to music illegally downloaded by Cox customers between 2012 and 2014. A hard disk of data gathered by anti-piracy company MarkMonitor was key evidence. However, the actual music files on that hard disk were re-downloaded in 2016, which is one of the issues raised by Cox. In a new court filing, the majors say that – because of the way MarkMonitor tracks piracy – the fact the actual files were downloaded after the period when the piracy occurred is irrelevant. And, more importantly, the ISP already knew that the files had been re-downloaded in 2016 during its trial. 

Cox has also brought up a set of data that was not available during its trial, relating to communication between the MarkMonitor system and that of audio ID company Audible Magic. The majors say that they also did not have knowledge of or access to that data during the trial and, anyway, “Cox had more than enough evidence to mount its defence” and this extra data “would have made no difference”. 

Spotify scathing about Apple’s latest app rule changes in EU

Apple has unveiled new terms for iOS app developers in the European Union in relation to in-app payments. EU rules, including the Digital Markets Act, have forced Apple to change those terms, which have long been criticised by Spotify. It announced a first round of changes earlier this year, but EU regulators said they were not good enough, and that Apple was still not compliant with the DMA.

Under the new terms, there is more flexibility for app developers who want to sign-post payment options outside of their apps, where they don’t have to use Apple’s commission charging transactions system. However, Apple will still charge fees on any transactions that begin within an app. The fees are slightly lower than those proposed earlier this year, and offer two options for app developers to pick from. 

But app developers like Spotify don’t want to pay any fees on transactions taken outside their apps. To that end, the music service was scathing about the new terms, which it said were “deliberately confusing” and “blatantly disregarded the fundamental requirements of the Digital Markets Act”. It urged EU regulators to rule that the new terms still violate the DMA and to instigate fines against Apple.

Taylor Swift shows cancelled after terrorist plot 

Three Taylor Swift concerts that were due to take place at Vienna’s Ernst Happel Stadium this week were cancelled in response to a possible security threat. A statement from the promoter of the shows said, “Due to confirmation by government officials of a planned terrorist attack at the Ernst Happel Stadium, we have no choice but to cancel the three planned shows for everyone’s safety”.

The cancellations followed the news that two people had been arrested on suspicion of planning a terrorist attack in the Austrian capital. The authorities said that the suspects were inspired by the Islamic State group after becoming radicalised via online platforms. It’s not clear the terrorist attack they were planning would have worked, but chemical substances were found at the home of one of the suspects.

Responding to the arrests and subsequent axing of Swift’s shows, Austrian Chancellor Karl Nehammer said he knew the cancellations would be a “bitter disappointment for all fans”, but added that the situation had been “very serious”. He went on, “Thanks to the intensive cooperation of our police and security agencies with foreign services, the threat was recognised early, combated and a tragedy prevented”.

ICYMI:

😎 Pitbull’s label is on the receiving end of the latest song-theft lawsuit. A company called All Surface Publishing claims that his track ‘I Feel Good’ rips off an earlier song called ‘Samir’s Theme’, which was shared with Pitbull collaborator DJ White Shadow in 2011.

✉️ UK creator groups – including the Featured Artists Coalition and Musicians’ Union – have sent a letter to various tech firms urging them to respect copyright when developing generative AI models. It also says that, when AI companies negotiate licensing deals with corporate rightsholders, they should seek assurances that those companies have secured creator consent.

🇫🇮 Finland’s decision to halve private copying compensation to €5.5 million has drawn the ire of creator groups. Critics argue that the cut violates EU law and jeopardises funding for crucial arts programmes, while demanding a return to €11 million and warning of “harmful and destructive” consequences.

🤖 The US Patent & Trademark Office has staged a roundtable on the legal protection of likeness and voice in the context of AI. There was support for a new digital replica right, like that proposed in the NO FAKES Act in US Congress, but the movie and gaming sectors cautioned against making that new right too wide-ranging.

🎫 The new UK government has pledged to introduce a price cap on ticket resale. This is bad news for Viagogo, which has ramped up its PR efforts, including publishing stats on fananomics and having MD Cris Miller provide Olympic-themed criticism of any new regulations. Anti-touting campaigners say that the PR push shows the price cap plan has Viagogo bosses “rattled”. 

✂️ Warner Music recently announced a significant restructure of its recorded music business. It involves a flattening of its corporate hierarchy and more execs reporting directly into CEO Robert Kyncl. The major’s current CEO of Recorded Music, Max Lousada, is stepping down. It was originally announced that Atlantic Music Group co-CEO Julie Greenwald would move into a new role at the major as part of the rejig, but it has since been revealed she is also departing. Elliot Grainge becomes CEO of the Atlantic Music Group.

🥊 Suno and Udio recently submitted responses to the lawsuits filed against them by the major record companies, presenting a fair use defence and accusing the majors of anticompetitive conduct. The RIAA hit back, saying that the responses contain a “major concession”, but mainly continue to mislead.