📑 CMU Digest: Cox takes major label dispute to Supreme Court + court dismisses Eminem publisher’s Spotify lawsuit

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

This week: Cox Communications has asked the US Supreme Court to overturn the billion dollar judgement that held it liable for its users infringement of music copyrights, arguing the ruling sets a dangerous precedent. A US judge has dismissed a lawsuit filed against Spotify by Eminem publisher Eight Mile Style. Cornwall Council has launched an investigation into the crowd surge that occurred at this year’s Boardmasters festival. The US government hits back at Live Nation’s claim that its competition lawsuit against the live giant should be heard in a DC court, rather than in New York. And Patreon joins Spotify in dissing Apple’s app rules. 

ICMYI: New Zealand is extraditing MegaUpload founder Kim Dotcom to face criminal copyright charges in the US; songwriters criticise PRS in open letter as part of direct licensing lawsuit; visual artists’ copyright lawsuit against Stability AI allowed to proceed; music organisations hit out at Anthropic’s “tired arguments” in copyright case; creator organisations send open letter to AI companies; Finland’s private copyright compensation cutback criticised.

Cox Communications takes its major label copyright battle to the US Supreme Court

The American internet service provider wants the top US court to overturn the 2019 billion dollar judgement that held it liable for its users’ copyright infringement. Cox argues that the case sets a dangerous precedent that, in its words, “could jeopardise internet access for Americans and fundamentally change how internet service providers manage their networks”. 

That’s because, it claims, the judgement puts pressure on ISPs to disconnect users whose account is used to illegally share just a couple of music files. Ramping up the drama in its filing with the Supreme Court, Cox says, “Grandma will be thrown off the internet because Junior visited and illegally downloaded songs. An entire dorm or corporation will lose internet because a couple of residents or customers infringed”. And even if only the actual infringer is impacted by the disconnection, that’s a “very heavy punishment” given how crucial internet access is. 

The filing also states that less than 1% of the ISP’s users access unlicensed music, making it even harder to justify draconian measures forcing it to disconnect customers based on allegations of copyright infringement made by the major record companies.

Eminem publisher’s Spotify lawsuit dismissed

Eight Mile Style sued Spotify in 2019 for streaming Eminem’s songs without a licence. The streaming service was relying on the compulsory licence that covers mechanical rights in the US, but hadn’t completed the necessary paperwork for that licence to apply under the licensing system that operated prior to 2018’s Music Modernization Act. Judge Aleta Trauger concluded that Spotify didn’t properly license the mechanical rights in Eminem’s songs and rejected the argument that – because Spotify was paying Eight Mile Style royalties at rates set by the compulsory licence and the publisher was banking that money – there was an implied licence. 

However, Eight Mile Style worked with two companies on the management of its rights and royalties, Kobalt and Bridgeport, and it wasn’t clear which of those was the licensing entity, which should receive the compulsory licence paperwork, and whether a blanket licence negotiated with Kobalt covered Eminem’s music. Trauger said Eight Mile Style knew this was causing confusion and contributing to its music being streamed without licence, and yet it did nothing about it. And it was on those grounds that the lawsuit was dismissed, based on the legal principle of equitable estoppel, which allows a legal claim to be dismissed if the person making the claim played a “knowing, culpable role in fostering the defendant’s unlawful behaviour”.

Cornwall Council is investigating Boardmasters crowd surge

The local authority announced it was launching a public protection investigation into the crowd surge that occurred on the first day of the Newquay festival. The incident happened as audience members awaited a set by DJ Sammy Virji. Seven people were hospitalised and some of those impacted were critical of the way festival security responded. The capacity of the event increased this year and some also speculated that that had contributed to the crowd surge. 

Both promoter Vision Nine and local police were keen to stress that the crowd surge was an isolated incident that resulted in only minor injuries, with a statement from police disputing online speculation that there had been fatalities. Vision Nine also insisted it had “experienced pit management and security teams” in place across the festival site. However, it added that learnings from the council’s investigation will be used to inform the planning of future editions.

Live Nation competition lawsuit should stay in New York, US government argues 

The US Department Of Justice is suing the live giant over allegations of anticompetitive conduct. It has filed its lawsuit with the courts in New York, but Live Nation argues it should be heard by the courts in Washington DC. The DoJ has now hit back at that suggestion. 

When Live Nation merged with Ticketmaster in 2010, it agreed a consent decree with the DoJ which put in place some restrictions on how the different strands of the combined business interact, designed to allay competition law concerns. That agreement falls under the jurisdiction of the DC courts. Live Nation says that the DoJ’s new lawsuit is an attempt to modify the consent decree, which is why it thinks the dispute should take place in the US capital. 

The DoJ says that the allegations of anticompetitive conduct made against Live Nation in the new lawsuit go “far beyond” merely breaching the terms of the consent decree. Many of the claims in the lawsuit relate to straight forward violations of US competition law, specifically the Sherman Act. Therefore there is no need to pursue the litigation in DC, and there are logistical reasons to pursue it in New York, where lots of entertainment companies are based.

Patreon joins Spotify in dissing Apple App Store rules 

Spotify has long criticised Apple’s rules relating to in-app payments, which force payments to be made via Apple’s commission charging transactions system, and previously stopped developers from sign-posting alternative payment options where Apple’s commission doesn’t apply.  

Apple was forced to change the rules around sign-posting in the EU on competition law grounds, though Spotify argues the changes do not go far enough. Nevertheless, it has begrudgingly signed up to Apple’s new EU terms meaning it can now provide information about subscription pricing and promotions within its iOS app in Europe. It is not yet linking to payment pages on its website, instead calling for further changes to the rules around sign-posting. 

Patreon has previously managed to circumvent Apple’s rules on in-app payments, meaning creators using the platform’s iOS app have been able to take payments via third party services without paying Apple’s commission. But that is changing, and from November subscription payments will go through Apple’s commission-charging system. Patreon has updated its users on how that will work and unveiled a tool that will allow creators to charge one price in its iOS app and another everywhere else, basically passing Apple’s commission onto the fan.

ICYMI:

🇳🇿 The New Zealand government has announced it is extraditing MegaUpload founder Kim Dotcom to the US to face criminal copyright charges relating to his former business. It comes after more than a decade of legal wrangling, though Dotcom still has more routes of appeal.

🎶 A group of songwriters who are suing PRS have written an open letter that is scathing of the UK collecting society. The letter is the latest development in a dispute over how PRS handles withdrawal of rights when writers want to license the live performance of their songs directly.

🎨 There has been an important ruling in one of the lawsuits filed by creators against generative AI companies. A judge has said that the core copyright claims in a lawsuit instigated by a group of visual artists against Stability AI and others can proceed, though other legal claims have been dismissed.

🧟 Various music industry trade organisations recently submitted an amicus brief to the court where music publishers are suing AI company Anthropic for copyright infringement. The new court filing says that Anthropic is relying on tired arguments and scare tactics in its defence of the publishers’ lawsuit.

💌 Earlier this month UK creator groups 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.