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."