Major streaming platforms challenge US royalty increase

In a 92-page document that was filed last week, the four argue that the CRB violated the Copyright Act and the American Psychological Association (APA) terms when it “adopted a rate structure and rate levels no party proposed during the hearing. The parties had no opportunity to present or rebut evidence concerning the structure and rates selected."

“Neither the Copyright Act nor the APA allows the board to discharge its statutory responsibility to set reasonable rates by making them entirely dependent on supra-competitive prices obtained by third-party private companies exercising substantial market power,” the document continues.

The four have also requested that the US Court of Appeals allow them an opportunity to present their case or defence by oral or documentary evidence, submit rebuttal evidence and to "conduct such cross-examination as may be required for a full and true disclosure of the facts.”

They also want the CRB to carefully examine the relevant expert methodologies, resolve competing arguments about their validity and coherently explain its ultimate rate-setting decision.

The CRB introduced the mechanical statutory rates in February this year. This did not go down well with four platforms and in March they separately filed a notice with the US District Court of Appeals as a precursor to a more detailed challenge.

National Music Publishers’ Association (NMPA) president David Israelite in March deemed the move to challenge the CRB’s proposed increase as "declaring war on songwriters".

“The CRB’s final determination gave songwriters only their second meaningful rate increase in 110 years,” he said. “Instead of accepting the CRB’s decision, which still values songs less than their fair market value, Spotify and Amazon have declared war on the songwriting community by appealing that decision.”

Speaking to Digital Music News, Digital Media Association (DiMa) CEO Garrett Levin said: “Streaming has reinvigorated the music industry and represents both the present and future of how fans engage with music whenever and wherever they want and how creators reach old fans and make new ones. All stakeholders should work to preserve and support the continued, unsurpassed growth that streaming has brought to the industry, and the innovations that have made it possible.”

Digital Music News reported that although a DiMA member like the appealing streaming services, Apple had not moved to appeal the hikes, as it saw the new rates as a healthy change for songwriter and publisher royalty structures.

Download the appeal document below (PDF).