Today, Apple has delivered a press release against Spotify's EU antitrust lawsuit. Spotify said, "All the benefits of a free app should be free." The statement contains the expected rebuttals to Spotify's claims about Apple's use of the app Charge Apple Music, but below is something interesting: a jab against Spotify unrelated to the EU fight.
"Only this week," the Apple release said, "Spotify sued music makers for a ruling by The US Copyright Royalty Board (CRB) called for Spotify to raise royalties." This line is obviously meant to be Spotify It's not a bad tactic, as the artist and Spotify have had a tough relationship for a long time, but the truth is, of course, a bit more complicated than that.
"When the music modernization law came into effect, there was hope that it would be a new day with improved relations between digital music signaling services and songwriters, "the Israelite said in a statement. "This hope was disappointed today when Spotify and Amazon decided to sue songwriters to cut their payments by almost a third."
But as well as The Verge did not mention anything about it, companies actually sue songwriters, and it's not very clear that they actually want to lower the overall record. Instead, they move on to the next stage of an interest rate process, which has been going on for three years.
The US Copyright Royalty Board, or CRB for short, is a panel of three judicial magistrates Library of Congress. Every few years, the CRB is required by US law to honor and review mechanical royalty fees. This is a payment that songwriters and publishers receive when a copy of their song is purchased or streamed. These include single copies, such as vinyl or digital downloads, but also "ephemeral copies" – temporary copies of interactive streaming services, such as Spotify, that enable on-demand streaming services.
What appeals to companies like Spotify and Amazon is the CRB's recent decision on mechanical royalties. This decision would gradually raise interest rates from currently 10.5 percent to 15.1 percent between 2018 and 2022 in five years, making it the largest rate hike in CRB history. The decision was officially announced a few weeks ago, with the clock being started on a 30-day window, in which appeals can be filed.
Spotify, Pandora, Google, and Amazon first applied for a CRB resumption by the judges in 2018 to review the ruling), usually clarifying several terms that companies considered too ambiguous (eg. the difference between "Limited Offerings" and "Limited Downloads"). In the reply, the judges said that there was no reason to grant a new hearing, but agreed to deal with some of the issues raised, which were then published in an order.
It looks like Spotify, Pandora, Google and Amazon are not entirely satisfied with the compromises outlined in this document, so they used the 30-day appeals window to get their claims from the various judges ,
In a blog post, Spotify says it supports the rate hike, but looks for the parameters that drop certain content below that rate to be better defined.
"We support US effective interest rates, which will rise to 15% by 2022, provided that they cover the right amount of publication rights," the letter says. "But the CRB rate of 15% does not take into account all these rights. For example, the rights for videos and texts are not taken into account. "Spotify claims that everyone is on the same page when it comes to making more money for songwriters, but the CRB process is too broad. "We're ready to support an increase in songwriter royalties," says Spotify, "provided the license includes the correct amount of publishing rights." The NMPA, in turn, believes that Spotify will eventually demand lower rates, as there are texts and lyrics, for example. Music videos have nothing to do with adjusting the CRB rate. It is a fight.
. However, it still is not "Spotify suing songwriters". The suit requires the initiation of legal proceedings against someone or something and the review of the CRB and the resulting decision have not been initiated by anyone. It is an administrative court with judges who are required by law to observe and review these sentences every few years. Now that a decision has been made and the application for retrial has been denied, Spotify and these other streaming services turn to the Court of Appeals, which is the only available next step in the process.
It is likely that this is the action. shifting the process from the CRB to the Appeals Tribunal – this prompted the NMPA to use the word "sue", but all that really happens is that the judges change and require these streaming services to look again at the adjustments they demand CRB's verdict. As entertainment lawyer Jeff Becker of Swanson, Martin & Bell told The Verge last week, it was expected for some time that these platforms would take the opportunity to preserve their bottom line through a call – this is the next step in a process involving billions.
It's important that Apple Music is covered by every decision Prices are set at the end of this process. So while Apple can sit back and shoot at Spotify, it will benefit from all the choices that Spotify, Amazon and Google prefer. This is not a bad position to be in
Why does Apple appeal to this? Probably because Spotify has actually sued Apple this week. It has filed an antitrust complaint with the European Union claiming that the 30 percent cut that Apple is taking on subscriptions completed on the App Store is unfair, and it was detrimental to consumers to opt for Spotify's decision to contact the CRB, where the Emotions are already high. It has nothing to do with Spotify's lawsuit against Apple, but it reminds us that although Apple operates a platform that does not really trust Spotify, Spotify is a platform that millions of artists do not really trust.