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Earlier in the day, Apple reacted in a press release to the complaint filed by Spotify to the EU, claiming that Spotify "wanted to enjoy all the benefits of a free app without being free." Apple Music, but there is something interesting at bottom: a jab against Spotify that has nothing to do with the fight of the EU.
"Just this week," says Apple, "Spotify is suing music creators after a decision by the US Copyright Royalty Board (CRB) forces Spotify to increase its royalty payments." This line is obviously intended to make Spotify a bad actor as a whole. and Apple as a friend of the artists to defend. This is not a bad tactic because artists and Spotify have a long and difficult relationship. But the truth is of course a little more complicated than that.
The idea that Spotify is suing the songwriters comes from David Israelite, CEO of the National Association of Music Publishers (NMPA), who called the Copyright Royalty Board's call for Spotify's rate-setting process shameful decision "in a Variety article last week.
"When the Music Modernization Act came into force, it was hoped that it would mark a new day for improving relations between digital music services and songwriters," Israelite said in a statement. a statement. "That hope has gone out today when Spotify and Amazon have decided to sue songwriters as part of a shameful attempt to cut their payments by nearly a third. . "
But like The edge As one of them points out, none of these companies are currently suing songwriters and it is not entirely clear that they are actually seeking to reduce their rates. Instead, they are moving to the next stage of a rate-setting process that has been going on for three years.
The US Copyright Royalty Board, or CRB, is a group of three administrative law judges appointed by the Library of Congress. Every few years, US law obligates the CRB to respect and revise mechanical royalty rates, which constitute a payment to songwriters and publishers whenever a copy of their song is purchased or broadcast in Canada. continued. This includes individual copies, such as vinyl or digital record downloads, but also "ephemeral copies" – temporary copies of streaming services of songs such as Spotify create that allow on-demand streaming services to work.
What businesses like Spotify and Amazon are calling is the CRB's most recent decision on mechanical royalty rates. This decision would gradually increase current rates from 10.5% to 15.1% over a five-year period from 2018 to 2022, making it the largest rate increase granted in the CRB's history. The decision was officially released a few weeks ago, opening the window on a 30-day window in which appeals can be made.
Spotify, Pandora, Google and Amazon first requested a new hearing from CRB in 2018 (asking judges to reconsider the decision), mainly to seek clarification on several terms deemed too ambiguous by companies (like the difference between "Offers limited "and" limited downloads "). In response, the judges stated that there was no reason to grant a new hearing, but they agreed to address some of the issues raised, which were subsequently published in an order.
It seems that Spotify, Pandora, Google and Amazon are not completely satisfied with the compromises outlined in this document. They took advantage of the 30-day appeal period to allow different judges to review their applications.
In a blog post, Spotify indicates that it supports rate increases, but seeks to more precisely define the parameters of the corresponding specific content.
"We support the increase in US effective rates to 15% by 2022, provided that these cover the rights of publication rights," the message says. "But the CRB's 15% rate does not take into account all these rights. For example, this does not take into account the cost of rights for videos and lyrics. Spotify says everyone is on the same page when it comes to making more money for songwriters, but the CRB process has been too broad. "We are ready to support an increase in songwriter royalties," said Spotify, "provided that the license encompasses the appropriate publication rights field". For its part, the NMPA indicates that Spotify is still asking for lower rates because Music videos have nothing to do with the process of setting the CRB rate. It's a fight.
But it's still not "Spotify suing songwriters in court". It is necessary to take legal action against a person or something like that, and the CRB's review and the resulting decision have not been initiated by anyone. It is an administrative tribunal composed of judges legally bound to meet and revise these rates every few years. Now that she has made a decision and the request for rehearing has been denied, Spotify and these other streaming services are appealing the Court of Appeal, which is the only available step in the process.
It's likely this action – moving the CRB process to the Court of Appeal – that has pushed the NMPA to use the word "sue", but all that is actually happening, is that the judges change and that these streaming services require another look at the adjustments that they asked for in the CRB decision. As entertainment lawyer Jeff Becker of Swanson, Martin & Bell said The edge Last week, it was expected for some time that these platforms would seize the opportunity to preserve their bottom line through a call: it was the next obvious step in a process with billions at stake.
It is important to note that Apple Music will be covered by any decision and that the rates are set at the end of this process. Thus, although Apple can spend time with Spotify to appeal, it will benefit from any favorable decision for Spotify, Amazon and Google. – which is not a bad position.
So why does Apple talk about it? Probably because Spotify has actually sued Apple this week. He filed an antitrust complaint with regulators in the European Union, alleging that the 30% discount Apple charges on subscriptions purchased through the App Store are unfair and detrimental to consumers.
While the two men end up there, Apple takes advantage of an easy opportunity to respond to Spotify's decision to appeal to the CRB, where the emotions are already alive. This has nothing to do with Spotify's lawsuit against Apple, but it reminds us that if Apple operates a platform, Spotify does not really trust, Spotify operates a platform on which millions of artists do not not really trust.
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