SiriusXM Sues SoundExchange, A2iM Over Antitrust Behavior
March 27, 2012 at 5:39 PM (PT)
SIRIUSXM Radio has filed a complaint against SOUNDEXCHANGE, INC. and AMERICAN ASSOCIATION OF INDEPENDENT MUSIC ("A2IM") alleging they unlawfully interfered in SIRIUSXM's efforts to secure, through a competitive market, copyrights critical to its business. The complaint contends that the conduct violates federal antitrust, as well as NEW YORK state law.
SIRIUSXM is primarily seeking injunctive relief to stop SOUNDEXCHANGE and A2IM from impeding its efforts to obtain the licenses it needs to operate its business in direct dealings with record companies instead of relying exclusively on licenses either negotiated with SOUNDEXCHANGE acting as the record industry's collective or on the outcome of regulatory rate-making proceedings. The complaint charges that, although SIRIUSXM has the legal right to reach out to individual record companies for such licenses, SOUNDEXCHANGE, in collaboration with other record industry organizations, has orchestrated an illegal boycott designed to choke off such competition.
As a result of the complained of conduct, SIRIUSXM has been forced to deal exclusively with SOUNDEXCHANGE to acquire statutory licenses at higher prices than it otherwise would have obtained through direct licensing with individual record labels. The complaint contends that this conduct and the ensuing boycott violate federal antitrust laws and tortiously interferes in SIRIUSXM's business relationships.
SIRIUSXM has signed nearly 80 direct licenses to date; the Company believes that without the complained of conduct, it would have attained far more. It contends that if SoundExchange, the trade associations and major record labels are allowed to continue this conduct, similar anti-competitive harm will likely impact other rights users who are unable to secure direct licenses to rights.