Sony Music: sued
Citing the judge in this case, Sony Music says it may "act on its own interests in a way that may incidentally lessen the other party's anticipated fruits from the contract."
Further more, in court papers unsealed yesterday, Sony is not obligated to enrich to the fullest extent the artists who have signed their music to the label. It postures that it is not obligated "to structure its affairs in whatever way yields the greatest royalties for 19."
19 is suing Sony on the grounds that the major label have unjustly withheld earnings from their artists with their significant bargaining power over Spotify. It claims in the suit that Sony and other major labels "have significant power to exert control over Spotify in order to not only dictate how revenue will be paid, but wrongfully and in bad faith divert money from royalties that must be shared to other forms of revenue that they can keep for themselves."
The plaintiffs have attempted to amend their lawsuit to include a breach of good faith and fair dealing as well as self-dealing. Sony is attempting to block this new amendment.
To those allegations, Sony has responded with two salient charges.
In its deal with 19, Sony claims that it has to account for revenue generated from "specific" recordings, but it may keep other money not generated from that particular song. "In short, the parties anticipated that SME may exploit the recordings in certain ways that would benefit SME, but that may not result in revenue for 19," it says.
It uses the example of piracy and copyright lawsuits, which was defended by an earlier decision by U.S. District Judge Abrams.
SME then attacks 19 for its lack of presenting facts in the case. It says, "royalty rates are only one strand of the multifaceted bundle of consideration paid by Spotify" dealings with the company, "reflects a variety of judgments and considerations."
See the full documents with some redactions below via The Hollywood Reporter:
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