In a bipartisan effort to ensure songwriters and music publishers were fairly compensated for their work, the Music Modernization Act (MMA) passed unanimously in both chambers and was signed into law on October 11, 2018. As law, the MMA was intended and expected to benefit the entire music industry, from songwriters and record labels to the listening public. Overall, it supported artists by updating royalty and licensing rules, and thus “modernized an archaic piece of legislation and promptly moved it into the 21st century.” The Act was broken up into three components: (1) creating a blanket license for interactive streaming services to make it easier for creators to collected royalties; (2) creating federal rights for owners of recordings made before February 15, 1971; and (3) creating a path to collect certain royalties for music producers, mixers, and sound engineers.
Although the Act has set off a new wave of pro-musician legislation, it appears that some music streaming giants that implemented the law found loopholes to avoid paying rightsholders their corresponding royalties. This is especially problematic for smaller artists who risk it all by pursuing music full-time and cannot afford to cut ties with these popular streaming services. However, in 2019, one streaming giant pushed its luck when it attempted to evade full payment to one of the most recognized musicians in the world.
In August of 2019, Eminem’s music publisher, Eight Mile Style, filed a lawsuit against Spotify, claiming the streaming giant infringed hundreds of copyrighted songs. By targeting Spotify’s behavior, the complaint challenged the constitutionality of the MMA. The publisher accused Spotify of “willful copyright infringement by reproducing ‘Lose Yourself’ and about 250 of the rapper’s songs on its service to the tune of potentially billions of dollars in alleged damages.”
In an alleged attempt to avoid paying the 15-time Grammy award-winning artist the royalties he was owed, Spotify had used a mechanical process of obtaining licenses only utilized when copyright owners are unknown. While this may have worked on less recognized artists, it was difficult for Spotify to argue they were unable to identify either the performer or rights holder of songs internationally recognized and accredited to Eminem.
By challenging Spotify, Eight Mile Style did not only publicize the streaming service’s abusive practices, but also attacked the limitations of the MMA itself. As a compromise to reach a consensus, the Act stated that if streaming companies increased the amount paid to rights holders, “the slate would be wiped clean for past infringement after the new system for obtaining rights went into effect.” This accommodation is problematic, as it essentially takes away the right holder’s ability to reclaim lost profits and statutory damages from any previous violations. Eight Mile Style classified this elimination of rights as an “unconstitutional denial of substantive and procedural due process, and an unconstitutional taking of Eight Mile’s vested property right.”
Three years after filing the initial complaint, the Eminem v. Spotify case is still ongoing and shows no signs of resolution in the near future. Most recently, Spotify argued that Kobalt, the administrator of Eight Mile Style’s catalogue, is at fault. The judge overseeing the case declined to issue a summary judgment on the side dispute involving this administrator. Having an artist of the stature of Eminem fight for his rights as a musician has significant implications for the future of music legislation. It has cast a light on the way streaming giants have been partially complying with the MMA and hindered their ability to take advantage of the Act’s compromises. The case has additionally played a significant role in the conversation on legislation that needs to pass regarding the rights of copyright holders. For example, in 2021, U.S. representatives introduced the American Music Fairness Act, a new bill that seeks to “ensure artists are fairly compensated when their songs are played on terrestrial radio stations.”
The MMA has undoubtedly created a more effective and transparent approach to music licensing and has been a much-needed first step in increasing the voice of all artists in the evolving streaming industry. However, Eminem’s case has proven that there are several more steps that must be taken to mitigate the otherwise imbalanced power dynamics between big music and individual artists.
Julia de Caralt is a second-year law student at Wake Forest University School of Law. Before attending Wake Forest, Julia received her undergraduate degree from Northeastern University with a combined major in International Affairs and Economics.