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SiriusXM Files Antitrust Suit Against Music Groups

3/28/2012 09:32:05 AM Eastern

New York - SiriusXM filed an
antitrust lawsuit in federal court against a major music-industry licensing
organization and a trade association representing independent record labels,
contending they are driving up its licensing costs by orchestrating a boycott
to prevent it from negotiating license agreements directly with individual
record labels.

 SiriusXM is being forced to deal exclusively
with licensing company SoundExchange "to acquire statutory licenses at higher
prices than it otherwise would have obtained through direct licensing with
individual record labels," the broadcaster contended. The company also pointed
out that the record industry, through SoundExchange, is seeking "extraordinary
increases" in statutory fees beginning in 2013.

 SiriusXM is asking a U.S. District Court in New
York State to stop SoundExchange and the American Association of Independent
Music (A2IM), which represents independent music labels, from forcing it rely
on licenses either negotiated by SoundExchange on record labels' behalf or set
as a result of regulatory rate-setting proceedings.

 SiriusXM has signed nearly
80 direct licenses to date but said it believes it "would have attained far
more" without what it describes as "illegal" activities by the music industry.

 
"SoundExchange, in collaboration with other record industry
organizations, has orchestrated an illegal boycott designed to choke off such
competition," SiriusXM contended. It cited "an orchestrated effort" against record
labels looking to negotiate directly with SiriusXM, including "mailings to
members, public statements released to the media and posted on their websites,
board-level discussions, direct pressure tactics placed on individual labels
known to be considering SiriusXM's offer, and even overt efforts to cause one
or more entities that actually signed a direct license to rescind it."

 The efforts prevent SiriusXM from negotiating
a single agreement with a record label to cover music transmitted by satellite,
Internet to PCs and home electronics devices, and by wireless to mobile
devices.  SiriusXM "can enter into a
unitary license agreement of such scope only through a direct license," the
companied contended. "It cannot do so under a SoundExchange statutory license."

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