Sirius/XM has filed suit in New York federal court against SoundExchange, Inc., a copyright collective that represents thousands of labels and artists. The plaintiff asks the court to dissolve SoundExchange or put in place a long-term oversight program. The suit comes amid negotiations over rates that the Copyright Royalty Board (CRB) will set for a five-year period beginning in 2013. The CRB, part of the Library of Congress, is an impartial panel of judges that sets royalty rates in various industries when negotiating parties can’t strike deals on their own.
Sirius prefers to strike its own licensing deals with music labels, and alleges that SoundExchange has organized a boycott to prevent individual deals; monopolize the licensing market; and raise licensing fees.
The plaintiff alleges numerous incidents of collusion, including mailings and media statements. In some cases, label executives reported to Sirius that they were told not to engage in direct-licensing talks. In addition, SoundExchange’s board is alleged to include representatives of the top four record companies, which control 70% of the market, as well as representatives of independent record companies.