Streaming Companies Sued for Alleged Conspiracy to Fix Licensing Fees

Pro Music Rights (PMR), an organization that collects license fees and distributes royalties for artists, songwriters, and composers, filed a complaint in the Connecticut District Court against streaming and broadcast companies including Apple, Amazon, Google, YouTube, Spotify, iHeartMedia, Pandora, and SoundCloud.  Licensing groups, such as the National Religious Broadcasters Music License Committee and the Radio Music License Committee, were also brought as defendants. Pro Music Rights is represented by Gora.

PMR alleged that the defendants “have choreographed a refusal, and continuous refusal to deal with PMR. No television station, radio station or music streaming service has entered into a license to perform the musical works in PMR’s repertory, let alone engaged in any substantive negotiations therefor.” PMR claimed these actions are not in the defendant’s best interests and that its fees and business model are reasonable. They accused the streaming services and their “anti-competitive agreement” of forming a monopsony by setting the price for a license and destroying competition among themselves.

“Despite several rounds of letters, emails, conference calls and other communications with various Defendants, the Cartel has maintained their course, executing on their illegal agreement to boycott PMR. PMR has been unable to secure any License from any member of the Cartel over the course of the past 2 years. As a participant in the market unlawfully restrained, controlled and rigged by the Cartel, PMR has suffered an injury of the type that the antitrust laws were intended to prevent,” PMR argued.

PMR claimed it is “the newest entrant into the market,” and added that it is the third-largest supplier at 7.4 percent market share. PMR alleged the defendants continued to perform its repertory, with the knowledge that they didn’t have a license. The plaintiffs previously filed a complaint against Amazon for not paying them royalties for streaming their music without a license.

Pro Music Rights alleged that the defendants are all “Cartel members” and are part of a conspiracy agreeing to fixed licensing fees to avoid competition. They purported that the alleged conspiracy members are waiting to purchase licenses at non-competitive prices despite the opportunity to make money from associating with PMR. PMR reasoned that “absent the Cartel’s conspiracy, it makes no sense for the thousands of radio stations represented by the RMLC and NRBMLC, the thousands of television stations represented by the TVMLC, the thousands of wineries represented by Wine America, the Streaming Defendants and the music streaming services by DiMA to not even explore the musical works in the PMR Repertory. None of them have done so.”