RIAA faces antitrust suit

Man bites pig

The Recording Industry Association of America (RIAA) could find itself on the end of an anticompetitive lawsuit filed by Internet broadcasters.

The Webcaster Alliance, an organization which represents grassroots streaming media, says it will take legal action "unless the RIAA takes concrete steps to address anticompetitive conditions in the market that threaten to eliminate small commercial webcasters."

The trade group reckons there are 10,000 small commercial webcasters in the United States, but the RIAA's monopoly on royalty collection favors the large players. Most are not in compliance with either the Library of Congress' royalty Determination, or the controversial "Voice of Webcasters" agreement - a deal which a break away group of broadcasters cut with the RIAA last year.

The case, if filed, could hinge on an unguarded comment by RIAA attorney Gary Greenstein, who said he didn't care if 25,000 webcasters went to the wall, because AOL would offer soon offer streaming channels.

The eight webcasters who signed the agreement could also find themselves in the firing line.

"VOW Eight apparently entered into an agreement among themselves, and with the RIAA, in order to establish minimum rates that would raise the costs of doing business to many small commercial webcasters - including many Alliance members. By raising rivals’ costs, the VOW Eight were apparently intent on either eliminating their competitors and/or raising barriers to entry in the market for small commercial webcasting."

It's ironic that the litigious RIAA finds itself, for once, on the receiving end of a lawsuit. A case of man bites dog - or more accurately, man bites pigopolist.

However John Simson of the RIAA's collection arm, SoundExchange, argues that broadcasters should pay for their hobby.

"The average hunter spends around $1,800 per year on their hobby. How much do photographers spend?" he told us. "It's all well and good to run a hobby, but Kodak doesn't give out free film. It's only right to pay a reasonable fee," he said.

The RIAA is given exclusivity to negotitate under the US Copyright Act, Section 114(e), which states that:

(1) Notwithstanding any provision of the antitrust laws, in negotiating statutory licenses in accordance with subsection (f), any copyright owners of sound recordings and any entities performing sound recordings affected by this section may negotiate and agree upon the royalty rates and license terms and conditions for the performance of such sound recordings and the proportionate division of fees paid among copyright owners, and may designate common agents on a nonexclusive basis to negotiate, agree to, pay, or receive payments.

… which isn't the same things as an Antitrust exemption. ®

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