Court Rules Against SoundExchange In CRB Rate Dispute

On Tuesday, the U.S. Court of Appeals for the D.C. Circuit upheld the Copyright Royalty Board rate determination for non-interactive web streams for the period of 2016-2020.

In 2015, the CRB established rates of $0.0017 per song play from ad-supported services, up from $0.0014 in the prior period. The CRB also established a rate of $0.0022 per play for subscription-based webcasters, which was lower than the previous rate of $0.0025 per

The following year, SoundExchange took the CRB to court and in the case of SoundExchange, Inc. v. the Library of Cong
ress, sought to challenge the rates set by the CRB on a number of grounds, including the CRB’s use of Pandora and iHeart rate agreements, as a baseline.

SoundExchange objected to the use of those deals as benchmarks, claiming that the rates were affected by the “shadow of the statutory license.”

SoundExchange also objected to the CRB’s use of the rates of interactive services, such Spotify as benchmarks, contending that the rates for all services and claimed that the CRB ignored how the statutory license could prevent parties from negotiating rates above the statutory royalty.

SoundExchange also challenged the CRB’s decision to use steered rates as benchmarks, noting that the discounted steered rates came with the promise of increased performance of the record company’s recordings. According to SoundExchange, the use of those rates as a benchmark distorted the market and unfairly affected the rate determination.

However, in each case, the court ruled against SoundExchange, noting that the CRB had adequately, and fairly considered its rate decision and followed earlier precedents in making its determination.

SoundExchange has not issued a statement on the ruling.