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The French government’s decision to impose a new tax on music streaming platforms will be highly damaging for the country’s music industry and sets a “dangerous precedent” for other markets, warn streaming executives opposing the levy.
France’s National Assembly officially approved the tax charges on Tuesday (Dec. 19) as part of the country’s 2024 finance bill.
It specifies that streaming services such as Spotify, Deezer and Apple Music earning above 20 million euros ($22 million) in annual turnover will have to pay a new tax charge of 1.2% on all streaming revenue generated in France in addition to their existing tax duties. Social media platforms like Facebook and TikTok which license and feature music will also be subject to the tax charges.
The money will be used to help fund a national body to support the French music sector, The Centre National de la Musique (CNM), which was created in 2020 and is already partly financed by the live music industry.
The new levy comes into effect from Jan. 1, although music streaming services are still waiting for confirmation of when the first payment will be due to the French authorities.
‘A REAL BLOW’
Deezer CEO Jeronimo Folgueira says the tax on streaming platforms’ earnings will have “negative consequences for the entire music industry in France.”
“It is the worst possible outcome of all the different scenarios that we could have ended up with,” Folgueira tells Billboard. “Adding taxes is the worst way of trying to support the industry. It sets a very dangerous precedent for other markets.”
In a statement, a spokesperson for Spotify France called the tax “a real blow to innovation, and to the growth prospects of recorded music in France.”
The company said it is “assessing the implications of such a tax” and “strongly remain opposed to this unfair, unjust and disproportionate measure.”
On Wednesday (Dec. 20), Spotify France announced that it was pulling financial support for two local music festivals, the Francofolies de la Rochelle and the Printemps de Bourges, to help offset the extra tax burden.
Plans to tax music streaming platforms’ earnings in France have long been mooted by authorities and were first proposed in April by then-senator Julien Bargeton, who initially suggested a tax rate of 1.75% for services like Spotify, Deezer, Apple Music, Amazon Music and YouTube Music to support the French music industry.
In response, streaming executives and stakeholders from across the country’s music industry put forward a number of alternative funding solutions, including making a voluntary annual contribution of 14 million euros ($15 million) towards The Centre National de la Musique.
Executives closely involved in those talks tell Billboard that the voluntary contribution proposal — which involved the participation of collecting societies and music producers and was tiered depending on a company’s business and turnover — received “near unanimous” backing from across the sector, apart from Amazon, which refused to commit. (Amazon Music, Apple Music and YouTube Music all declined or didn’t respond to requests to comment when contacted by Billboard).
With the music industry unable to agree on an alternative offer, the French Senate voted in November to approve the new tax measures, which were formally ratified earlier this week.
TAX BURDEN
President Emmanuel Macron’s decision to tax music streaming companies to fund cultural programs follows the same principles the country already applies to the film industry. For many decades, the French government has imposed a tax levy on cinema ticket sales (currently amounting to 10.7% of the ticket price) to fund public body The French National Centre of Cinema (CNC).
Since 2010, publishers and distributors of television services, including streaming platforms like Netflix and ad-funded videos platforms such as YouTube, as well as DVD and Blu-Ray retailers, have paid a similar mandatory contribution set at 5.15% of turnover.
Like its cinema counterpart, funding for The Centre National de la Musique will come from across the French music industry, but executives at Spotify and Deezer believe it places an unfair burden on streaming companies who already pay out around 70% of their revenues to rights holders alongside their existing tax commitments in France. They include sales tax (VAT) at 20% and a 3% tax on digital services.
At present, the French live music industry pays a higher rate of tax contribution (3.5% on concert tickets) towards the CNM, but ticketing companies pay a lower rate of VAT sales tax (around 5%) compared to digital music platforms.
Physical music retailers, recording studios, radio services and labels are exempt from paying the new 1.2% levy.
“We’re not questioning the need to finance The Centre National de la Musique or be taxed. What we’re questioning is the decision to only target one distribution format – DSPs,” says one France-based music executive, speaking to Billboard anonymously.
Folgueira says the tax unfairly impacts on European streaming platforms like Deezer and Spotify, which have heavily invested in developing the local market, and disproportionately advantages American tech giants like Google, Apple and Amazon who have a smaller on-the-ground presence and “can easily absorb the costs.”
Paris-based Deezer is the market leading subscription streaming service in France and generates around 60% of its 451 million euros ($478 million) yearly revenue in the country. A tax rate of 1.2% on domestic turnover works out at around 3.2 million euros ($3.5 million), according to Billboard’s calculations.
CUTS COMING?
Folgueira says the new tax burden could possibly mean that Deezer is forced to pass on the extra costs “along the value chain,” which could include reviewing agreements with labels and rights holders.
The CEO says that it’s likely to mean Deezer cutting spend on domestic music projects and marketing, while price rises for subscribers is another possible outcome. “None of which is a good outcome for boosting the French market,” cautions Folgueira.
France is the world’s sixth largest recorded music market with €920 million in revenue in 2022, up 6.4% on the previous year, according to IFPI’s Global Music Report.
Folgueira’s concerns are shared by executives at Spotify. Speaking last week to local news network France Info, Antoine Monin, director general of Spotify France said that the company will reduce its investment in the market as a result of the taxes and said “France will no longer be a priority for Spotify.”
Billboard understands that Spotify France will be making further cost saving announcements in the coming weeks with subscription price rises among the options on the table.
Confirmation of a new tax charge for streaming companies in France comes at a pivotal time for Spotify, which posted an operating profit of 32 million euros ($35 million) in the third quarter of 2023 but has also undergone three rounds of job cuts this year.
Earlier this month, Spotify co-founder and chief executive Daniel Ek announced that the company was to close more than 1,500 posts internationally, representing around 17% of its global workforce.
“For many months now, we have been denouncing the risks underlying the creation of such a tax, particularly in terms of the loss of attractiveness for platform investments in France,” says Alexandre Lasch, managing director of French labels body SNEP. “It is precisely the artists produced in France who will be the victims.”
Despite streaming companies’ opposition to the levy, other sectors of France’s music business have welcomed the increased funding towards domestic culture.
Guilhem Cottet, managing director of the French association of independent music companies UPFI, says the establishment of a mandatory contribution to the CNM from streaming companies will help drive diversity and innovation in the sector.
“The current remuneration model is unjust towards a lot of musical genres which are not heavily listened to by young people — mostly rap and electronica — in France. And if there’s no decent remuneration, labels will cease producing these genres,” says Cottet.
“The tax is a regulation tool to ensure the CNM is able to finance them and make sure diversity prevails.”
Vinyl Group announced on Thursday a binding agreement to acquire The Brag Media, publisher of Australian and New Zealand editions of Rolling Stone and Variety, as well as publisher of its own tiles including TheBrag. com, Tone Deaf and industry news outlet The Music Network.
The proposed takeover of Brag Media, pending certain conditions and expected to close by Jan. 31, is being funded by an $11 million AUD ($7.5 million USD) round of investment in Vinyl Group by billionaire Wisetech Global chief executive Richard White, who when completed will own more than a third of the ASX-listed business. With funding in place, Vinyl Group’s purchase of 100% of Brag Media will break down as $8 million in cash and a further $2 million in deferred compensation through cash or stock.
Brag Media originated as Seventh Street Media in 2017, launching local trade outlet The Industry Observer and youth-focused title Don’t Bore Us, before rebranding as The Brag Media in 2019 — the same year it partnered with Billboard parent Penske Media to launch Rolling Stone Australia. Brag also represents the digital audiences in the market for Billboard and The Hollywood Reporter, as well as Rotten Tomatoes, Hypebeast and others. In 2022, Brag bought The Music Network and shuttered Industry Observer. Based on unaudited figures disclosed in the announcement, The Brag Media generated $8.39 million in revenue in its current fiscal year, generating a net profit of $334,824.
Once the acquisition is complete, Brag Media’s portfolio will join a Vinyl Group that also includes music credits specialist Jaxsta, social networking platform Vampr and online record store Vinyl.com. As part of the deal, Brag Media’s co-founder and CEO Luke Girgis is set to remain as publisher and managing director of the company’s publishing business.
“Vinyl Group’s suite of products work together to empower participants of the music ecosystem and reach all corners of the creator economy, and we can’t wait to start working with the iconic mastheads that Luke and The Brag Media have successfully developed in Australia,” said Vinyl Group CEO Josh Simons, who took over the top job in late June following the departure of Beth Appleton. “We’ve identified several impactful synergies between the two businesses that will deliver immediate cost efficiencies and revenue, including streamlining Vampr’s in-app ads business and leveraging The Brag Media’s impressive audience reach to bolster Jaxsta, Vinyl.com and Vampr in the market.”
Girgis added that he “couldn’t be happier about” the consolidation. “Right from the earliest discussions we had, it was clear that the Board, Josh and the team shared our vision for the future of the business, and I’m thrilled that they’ve made this commitment with us.”
White said there is “no doubt that iconic brands like Rolling Stone and Variety make sense and add value to VNL. Combined under the leadership of Josh and Vinyl Group, the consolidated business and team will have a lot more growth levers and options.”
Vinyl Group is Australia’s only ASX-listed music business and trades under the ticker code VNL (it was JXT before a recent parent company name change). Its share price jumped 22% to .055 following the acquisition announcement.
Medallion, a direct-to-consumer platform that helps artists build relationships with their fans, has raised $13.7 million in Series A funding, the company announced Thursday (Dec. 21). The funding will help Medallion, which is led by former Songkick CEO Matt Jones, “to accelerate an ambitious technical roadmap,” the company said in a statement.
The round was co-led by Dragonfly and Lightspeed Faction and included Coinbase Ventures, Infinite Capital, J17, Third Prime, Zeal Capital and previous investor The Chernin Group. Also taking part in the round were music industry investors including Metallica’s Black Squirrel Partners; Bill Silva Entertainment; Guy Lawrence of electronic duo Disclosure; Foundations Artist Management; producer duo Jungle; the band Mt. Joy; management company Method; DJ and producer Tiga; and TAG Music, a joint venture between Gabe Saporta and Atlantic Records.
This marks Metallica’s third notable investment in 2023 via Black Squirrel. In March, the band purchased Furnace Record Pressing, a vinyl manufacturer in Alexandria, Va. Then in August, Black Squirrel was the lead investor in a $5 million funding round for Word Collections, a publishing administration firm launched by TuneCore founder Jeff Price.
Launched in 2022, Medallion provides a white-label platform for artists to create online communities that deliver experiences and products to their fans. Its client roster includes such artists as My Morning Jacket, Sigur Ros, Santigold, Tycho, Greta Van Fleet and two of its investors, Mt. Joy and Jungle.
For Rob Hadick, general partner at Dragonfly, Medallion represents a shift in thinking about providing fans with more than music and content. “Medallion is building the infrastructure to enable artists to directly interact with their highest intent customers through new and exclusive products and experiences, while simultaneously owning the customer relationship themselves and driving net new revenue opportunities around their IP,” Hadick said in a statement. “We believe this paradigm shift will permeate across the entirety of the creator economy.”
“Artists only have direct relationships with a fraction of their fanbase. Medallion solves this problem by unlocking direct artist-to-fan connection,” said Will Leas at Lightspeed Faction in a statement. “The team has a history of building pioneering technology for the world’s biggest artists, and we are thrilled to back them on this journey.”
Medallion previously raised $9 million in seed funding from Betaworks, POAP Ventures, Polygon Ventures, The Chernin Group, Red Light Ventures, Linkin Park’s Mike Shinoda and Tycho.
SiriusXM is facing a lawsuit from New York’s attorney general over allegations that the satellite radio and streaming service has made it “extremely difficult” for listeners to cancel their subscriptions.
In a complaint filed Wednesday (Dec. 20) in Manhattan court, Attorney General Letitia James’ office accused SiriusXM of subjecting canceling customers to “a lengthy and burdensome endurance contest,” which allegedly requires phone conversations with a live agent and extended time spent on hold.
“Sirius deliberately wastes its subscribers’ time even though it has the ability to process cancellations with the click of a button,” attorneys from James’ office wrote in the lawsuit. “The only reason Sirius requires cancelling subscribers to interact with a live agent at all is to maximize its opportunity to retain them as subscribers.”
In a statement announcing the lawsuit, James said it followed an investigation that showed SiriusXM was “trapping consumers” with its cancellation process, including by training its employees “not take ‘no’ for an answer.”
“Having to endure a lengthy and frustrating process to cancel a subscription is a stressful burden no one looks forward to, and when companies make it hard to cancel subscriptions, it’s illegal,” James said. “Consumers should be able to cancel a subscription they no longer use or need without any issues, and companies have a legal duty to make their cancellation process easy.”
Following the filing of the lawsuit, a spokeswoman for SiriusXM said the company would “vigorously defend against these baseless allegations,” saying that they “grossly mischaracterize” its practices.
“It’s telling that the New York Attorney General issued a press release before providing SiriusXM with a copy of the complaint,” the company statement said. “Like a number of consumer businesses, we offer a variety of options for customers to sign up for or cancel their SiriusXM subscription.”
According to the new lawsuit, SiriusXM automatically renews subscriptions at the end of a term unless a user calls on the phone to cancel. The lawsuit claims that users are sometimes forced to wait as long as 25 minutes just to connect with an agent, who then subject them to a “six-part script” in which they are trained to repeatedly refuse to actually terminate the subscription.
“Sirius requires its live agents to present a series of renewal offers to retain the consumer as a subscriber,” the AG’s office wrote in the lawsuit. “But when a consumer declines an offer, or refuses to hear further offers, Sirius instructs its agents not to take ‘no’ for an answer.”
By doing so, SiriusSM forces subscribers to “devote inordinate amounts of time, patience, and stamina trying to cancel a subscription they no longer wish to pay for,” the lawsuit says, even though they have a “legal and contractual right to cancel anytime using a process that is simple and efficient.”
Just one day after announcing a delay in publishing interim financial results for the six months ended Sept. 30, Hipgnosis Songs Fund has announced the appointment of a new auditor.
In a press release on Wednesday (Dec. 20), the Merck Mercuriadis-led company said it had appointed KPMG Channel Islands Limited as its new auditor, “with immediate effect for the financial year ended” Mar. 31, 2024. KPMG succeeds PricewaterhouseCoopers (PwC) in the role.
The release notes that the appointment of KPMG will be subject to approval by the company’s shareholders at a general meeting “to be convened in due course.”
“The previous auditor, PwC CI, has deposited with the Company a statement confirming that there are no matters to be brought to the attention of the Company’s members or creditors,” the release adds.
On Tuesday, Hipgnosis Songs Fund said it would delay publishing its financial results over concerns about its valuation, explaining that the valuation it received from an independent firm was “materially higher than the valuation implied by proposed and recent transactions in the sector.” These transactions include the proposed $417.5 million sale of 29 catalogs to Blackstone-backed Hipgnosis Songs Capital — a price reflecting a 24.3% discount from a valuation dated March 31 — and last week’s sale of 20,000 “non-core songs” to an undisclosed buyer for $23.1 million, which the company said reflects a 14.2% discount on the songs’ valuation as of early fall.
Hipgnosis Songs Fund now expects to announce its financial results on New Year’s Eve, according to the regulatory filing.
Hipgnosis is composed of three companies: Hipgnosis Song Management, Hipgnosis Songs Capital and Hipgnosis Songs Fund, the latter of which has been the subject of controversy for months. On Oct. 16, the London-listed trust revealed that it would not pay its investors a dividend due to new, lower revenue projections. On Oct. 26, more than 80% of the fund’s investors demanded structural changes to the music rights company, voting in favor of the board drawing up “proposals for the reconstruction, reorganization or winding-up of the company to shareholders for their approval within six months.”
Last month, it was also announced that the fund will not declare dividends before the fiscal year, which begins in April, to ensure it has enough on its ledger to pay contractually mandated catalog bonuses.
Hipgnosis Songs Fund owns full or partial rights to the song catalogs of artists including Justin Bieber, Neil Young, Bruno Mars, Jimmy Iovine, 50 Cent, Shakira, Blondie, Justin Timberlake and Lindsey Buckingham.
Hipgnosis Songs Fund ended the day up 1.43% on the London Stock Exchange following the announcement of the new auditor.
After a probation-reform bill became Pennsylvania law last Friday, chart-topping rapper Meek Mill teared up and a key music-business advocacy group echoed his support.
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“We are definitely happy about these results,” says Prophet, co-founder, president and CEO of the Black Music Action Coalition, a group of attorneys, artists, label executives and managers formed in 2020 to address racism in the industry. “No laws have completely given us what we need, but these are huge steps. If I were a governor in any state, I’d be looking at what Pennsylvania did and following suit — especially in an election cycle.”
In 2008, just as his music career was taking off, 18-year-old Mill was sentenced to prison for a drug and firearm conviction. A court overturned the ruling 11 years later, and earlier this year, Pennsylvania’s then-governor, Tom Wolf, pardoned him for the original charges. Mill, who lives in Philadelphia, has been on probation for much of his life, and has advocated for criminal-justice reform for years. After Gov. Josh Shapiro signed the legislation Friday, the rapper spoke of not being able to pick up his son from school in New Jersey due to parole regulations. “They labeled us felons,” he said at Friday’s ceremonial bill-signing. “I had to fight against that the whole time to gain my respect and be who I am today.”
The new Pennsylvania law passed a bipartisan state senate vote last Thursday, despite opposition from the ACLU, which said it will “risk making probation worse.” The law, known as Comprehensive Probation Reform, requires probation reviews after either two years or half of a misdemeanor sentence, or four years or half of a felony sentence. It also urges judges not to send people back to jail for minor technical parole violations.
“We all learned from Meek’s case because it shined a light on the injustices in our probation system,” Shapiro told reporters after signing the law.
In addition to praising the new Pennsylvania law, the BMAC’s Prophet predicted the result will inspire artists, people of color and young people to be more politically active. “What that does is trigger the alarm to many young people, a base that for the most part is either uninspired or not engaged, to see that they actually have political power,” he says. “The Black vote saved the 2020 election. We haven’t gotten a lot in return. Now the Democrats and the Republicans are going to be held to a level of accountability that hasn’t been seen before.”
“People are inspired. People are saying, ‘Look, Meek just changed the law,’” Prophet adds. “It’s that sort of simplicity of the process that inspires people.”
Gavin DeGraw has signed with Sony Music Nashville on the heels of his latest EP, A Classic Christmas. DeGraw, who was previously on Sony’s RCA Records, is managed by Haley McElmore and JT Pratt at Otter Creek Entertainment.
ADA Worldwide‘s Latin division has signed a global distribution agreement with Mexican music star Alicia Villarreal and her label, Camixes Entertainment. The deal marks Villarreal’s return to releasing music after a seven-year hiatus. Her first independent single, “Ojo Por Ojo,” was released last month, while a new album is expected out next year. Villarreal is booked and managed by Apodaca Group.
Rock artist Two Feet has launched an independent record label, 477 Records, and signed emerging talent including Bec Lauder, Toby Mai and Elvis Drew. The label will also release Two Feet’s upcoming music, including the new single “Kill Anyone” feat. Ari Abdul. Two Feet is booked by Jay Moss and Steph Aristakesian at Wasserman and managed by G.D. Dess; Lauder is represented by NEXT Management.
19 Recordings and BMG signed Haven Madison, a top 8 finalist on Season 21 of American Idol who performed original songs including “Fifteen” and “Still Need You” on the series. Madison, who independently released the EP All the Things I Didn’t Say in 2022, is managed by Third Wave Music Group.
Cricket Productionz, the company of music producer Alvaro “Cricket” Venegas (Peso Pluma), has signed a global distribution and artist partnership deal with Warner Music Latina. Under the deal, Cricket will release a debut album for his artist project in 2024.
TR/ST, the electronic pop project of Robert Alfons, has signed with Dais Records, which released his latest single, “Robrash,” on Dec. 13. An EP release is planned for next year. TR/ST is managed by Shabnam Mohammad at 724 and Gary Walker at Monotone, with booking by Chris Danis and Avery McTaggart at TBA for North America and Matt Copely in the United Kingdom and the rest of the world. TR/ST previously had a label deal with Grouch.
Red Bull Records has signed South London R&B singer-songwriter James Vickery, who most recently released the EP Sheet Music in March. Vickery is managed by Alex Lewis at Lemon Music.
Singer-songwriter and Texas native Laci Kaye Booth has signed with Geffen Records and also aligned with Red Light Management for management and WME for booking. – Jessica Nicholson
Korn member Brian “Head” Welch launched a new label, XOVR Records (pronounced Crossover Records), alongside his longtime personal manager, David W. Williams. The label’s first signing is the rock band Spoken featuring Welch’s Love and Death bandmate JR Bareis. The group will release its tenth album, Reflection, via XOVR on Mar. 15. Spoken is managed and booked by Williams.
Australian post-punk band HighSchool has signed to [PIAS], which released the group’s latest single, “August 19,” on Dec. 5. HighSchool is managed by Rich Walker at 4AD and Matt Brown at Stay Loose, with booking by Andy Cook at CAA.
Kanine Records signed New York quintet Punchlove, which released the single “Dead Lands” via the label on Dec. 6.
Professional rodeo cowboy-turned-country artist Gunnar Latham has signed with Bob Doyle & Associates for management. Latham is booked by Chad Kudelka at CAA; he currently has no label.
Danish-Japanese artist Ida Kudo has signed with Pasadena Records, which will release her new EP, Proud, on Apr. 19 via a joint venture with Denmark’s Nordic Music Society. Her latest single, “The Power That Is Woman,” is out now.
Brooklyn-based alt-country songwriter Emily Frembgen signed to Don Giovanni Records, which recently released her single “Fentanyl.” The label will release Frembgen’s debut album next year.
Absolutely Kosher Records has signed Memphis duo Nonconnah, marking the first signing since the label’s relaunch this fall following a 12-year absence. New music is coming from the duo next year.
SCP Merchandising, an Illinois-based merch company used by artists including Mitski, Father John Misty and Carly Rae Jepsen, has shut down, according to a member of SCP leadership still on-site after the company laid off its staff over the weekend.
Based on accounts from multiple former SCP employees on LinkedIn, the company’s employees were abruptly laid off on Sunday evening (Dec. 17). The source tells Billboard that the company will most likely file for bankruptcy and that there is no process yet for clients to retrieve their merchandise, but that those with outstanding balances will not be able to do so until they pay those off with SCP or a potential bankruptcy trustee. They add that priority will be given to clients who have no balance due as well as those who are arranging for payment of unpaid bills.
The source notes that the company plans to send out an email Tuesday (Dec. 19) to clients who do not owe money to figure out pickup or shipping arrangements for their inventory; clients with outstanding balances must first make a payment and then reach out to SCP once that’s been done in order to coordinate receiving their stock. The source says those who still owe “should know that they are in debt to SCP” as the company has been sending past-due statements.
The source adds that after Thursday (Dec. 21), retrieving inventory may be slower for clients as SCP only has bank approval for payroll through that day, “and even so we don’t have enough for the entire job.” They continue: “After that, a court-approved trustee will replace company employees and that’s only one person and I’m not sure what their take on inventory will be. There’s a few different paths it could go. It’s just all very speculative.”
Meanwhile, artists’ online stores that ran through SCP have been taken down entirely, including Mitski, Father John Misty, Alec Benjamin, Dashboard Confessional, Louis the Child and Chappell Roan. One source in artist management says they haven’t heard from anyone at SCP yet and are trying to figure out how to collect their remaining merchandise. According to that source, they initially began working with SCP because the rates were significantly cheaper than their competitors: The company took 15% of net sales compared to around 20% of gross that, the source says, many others take.
Launched in 2013 by owner Stephen Hopkins, SCP bills itself on its website as a “full-service creative collaborator” for artists and brands. Other current and former artist clients include Billie Eilish, Freddie Gibbs, Tanya Tucker, Manchester Ochestra and Wiz Khalifa; the record label Loma Vista Recordings; and the festival Bittersweet Daze.
According to Hopkins’ LinkedIn profile, he also serves as co-founder/CEO of Web3 company Dropolis and co-founded 3E Love, a company that makes clothing for people with disabilities.
Additional reporting by Colin Stutz.
This is The Legal Beat, a weekly newsletter about music law from Billboard Pro, offering you a one-stop cheat sheet of big new cases, important rulings and all the fun stuff in between.
This week: Luke Combs apologizes after he accidentally sues a fan for $250,000; a Taylor Swift fan drops her lawsuit against Live Nation over the disastrous Eras presale; Lizzo fires back at one of the discrimination cases she’s facing; and much more.
THE BIG STORY: Luke Combs Accidentally Sues A Fan
How on earth do you sue someone unintentionally? That’s what the entire music industry was asking last week after Luke Combs said he had been “utterly unaware” that he’d sued a Florida woman and won a $250,000 judgment against her — all over the sale of a few Combs-themed drinking mugs on the internet.
The answer: By adopting the same kind of mass-litigation tactics used by big retail brands to fight fake merchandise on the internet. Suing hundreds of people at once and notifying them by email gives companies — and, increasingly, music artists — a powerful tool to help stem a flood of confusing knockoffs, but some legal experts warn that such litigation can be “abusive.”
For more, go read our full story — on Combs’ apology to the fan, his underlying lawsuit, and the strange world of anti-counterfeiting litigation that it highlighted.
Other top stories this week…
YOUNGBOY HOUSE ARREST – A federal judge refused to alter the conditions of NBA YoungBoy‘s house arrest to let him spend more time in the recording studio creating music while he awaits trial on federal gun charges. The judge was unswayed by arguments from the rapper’s attorneys that his record sales have dropped because he has been unable to travel to the studio to “produce the quality of music that his fans expect.”
MJ ESTATE STRIKES AGAIN – Lawyers for the Michael Jackson estate quietly threatened to sue a pop culture collectibles website last week over plans to auction off unreleased Jackson studio recordings that the estate claimed were “unquestionably stolen,” resulting in the site withdrawing the materials from the sale.
MARILYN MANSON RULING – A California appeals court ruled that Marilyn Manson’s former assistant Ashley Walters could sue him for sexual assault, overturning an earlier decision that said she waited too long to bring her case. The appeals court said she potentially had “trauma-induced memory suppression” that rightfully delayed the filing of her case.
TICKETMASTER CASE SWIFTLY DROPPED – A Taylor Swift fan named Michelle Sterioff agreed to drop her class action against Ticketmaster parent Live Nation — one of two such cases filed in the wake of last year’s disastrous presale of tickets to the Eras Tour.
LIZZO HITS BACK – Lizzo’s attorneys fired back at a harassment and discrimination lawsuit filed by Asha Daniels, a former clothing designer for her tour — arguing that the accuser was nothing more than a “disgruntled” employee who had been fired after she “played hooky” on the day of a concert.
Google has agreed to pay $700 million and make several other concessions to settle allegations that it had been stifling competition against its Android app store — the same issue that went to trial in another case that could result in even bigger changes.
Although Google struck the deal with state attorneys general in September, the settlement’s terms weren’t revealed until late Monday in documents filed in San Francisco federal court. The disclosure came a week after a federal court jury rebuked Google for deploying anticompetitive tactics in its Play Store for Android apps.
The settlement with the states includes $630 million to compensate U.S. consumers funneled into a payment processing system that state attorneys general alleged drove up the prices for digital transactions within apps downloaded from the Play Store. That store caters to the Android software that powers most of the world’s smartphones.
Like Apple does in its iPhone app store, Google collects commissions ranging from 15% to 30% on in-app purchases — fees that state attorneys general contended drove prices higher than they would have been had there been an open market for payment processing. Those commissions generated billions of dollars in profit annually for Google, according to evidence presented in the recent trial focused on its Play Store.
Eligible consumers will receive at least $2, according to the settlement, and may get additional payments based on their spending on the Play store between Aug. 16, 2016 and Sept. 30, 2023. The estimated 102 million U.S. consumers who made in-app purchases during that time frame are supposed to be automatically notified about various options for how they can receive their cut of the money.
Another $70 million of the pre-trial settlement will cover the penalties and other costs that Google is being forced to pay to the states.
Although Google is forking over a sizeable sum, it’s a fraction of the $10.5 billion in damages that the attorneys general estimated the company could be forced to pay if they had taken the case to trial instead of settling.
Google also agreed to make other changes designed to make it even easier for consumers to download and install Android apps from other outlets besides its Play Store for the next five years. It will refrain from issuing as many security warnings, or “scare screens,” when alternative choices are being used.
The makers of Android apps will also gain more flexibility to offer alternative payment choices to consumers instead of having transactions automatically processed through the Play Store and its commission system. Apps will also be able to promote lower prices available to consumers who choose an alternate to the Play Store’s payment processing.
Investors seemed unfazed by the settlement as shares in Google’s corporate parent, Alphabet Inc., rose slightly in Tuesday’s midday trading.
The settlement represents a “loud and clear message to Big Tech — attorneys general across the country are unified, and we are prepared to use the full weight of our collective authority to ensure free and fair access to the digital marketplace,” said Connecticut Attorney General William Tong.
Wilson White, Google’s vice president of government affairs and public policy, framed the deal as a positive for the company, despite the money and concessions it entails. The settlement “builds on Android’s choice and flexibility, maintains strong security protections, and retains Google’s ability to compete with other (software) makers, and invest in the Android ecosystem for users and developers,” White wrote in a blog post.
Although the state attorneys general hailed the settlement as a huge win for consumers, it didn’t go far enough for Epic Games, which spearheaded the attack on Google’s app store practices with an antitrust lawsuit filed in August 2020.
Epic, the maker of the popular Fortnite video game, rebuffed the settlement in September and instead chose to take its case to trial, even though it had already lost on most of its key claims in a similar trial targeting Apple and its iPhone app store in 2021.
The Apple trial, though, was decided by a federal judge instead of the jury that vindicated Epic with a unanimous verdict that Google had built anticompetitive barriers around the Play Store. Google has vowed to appeal the verdict.
Corie Wright, Epic’s vice president of public policy, derided the states’ settlement as little more than a one-time payout that provides “no true relief for consumers or developers,” in a blog post.
In court documents, the attorneys general said they decided to settle because of significant risks posed by a trial, including the possibility that a jury may have thought their plan to seek $10.5 billion in damages was exorbitant. The attorneys general also cited for the potential of jurors becoming confused had their case been presented alongside Epic’s claims in the trial, as had been the original plan.
But now the Epic trial’s outcome nevertheless raises the specter of Google potentially being ordered to pay even more money as punishment for its past practices and making even more dramatic changes to its lucrative Android app ecosystem.
Those changes will be determined next year by U.S. District Judge James Donato, who presided over the Epic Games trial. Donato also still must approve Google’s Play Store settlement with the states.
“In the next phase of the case, Epic will seek meaningful remedies to truly open up the Android ecosystem so consumers and developers will genuinely benefit from the competition that U.S. antitrust laws were designed to promote,” Wright pledged.
Google faces an even bigger legal threat in another antitrust case targeting its dominant search engine that serves as the centerpiece of a digital ad empire that generates more than $200 billion in sales annually. Closing arguments in a trial pitting Google against the Justice Department are scheduled for early May before a federal judge in Washington D.C.