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X Corp. Sued for $250 Million by Music Producers for Refusing to Pay Licensing Fees

Published onMay 13, 2024
X Corp. Sued for $250 Million by Music Producers for Refusing to Pay Licensing Fees

In Concord Music Group v. X Corp., social media giant X Corp., formerly Twitter, was sued by seventeen music producers, including Concord Music Group, Universal Music Corp., Sony Music Publishing, and Warner Chappell Music. The complaint was filed on June 14, 2023, in the Middle District of Tennessee, in which nearly fifty named plaintiffs alleged that X infringed on copyrights for over 1,700 songs and claimed damages of up to $250 million.

Typically, social media platforms pay licensing fees to publishers so users can legally post content with copyrighted music in it. For example, YouTube paid $6 billion to the music industry from July 2021 to June 2022. Social media platforms benefit from users posting content with copyrighted music because it increases engagement and, thus, advertising revenue. These platforms pay the licensing fees in exchange for the copyright holder’s permission to use the copyrighted works in specific, negotiated ways.

The complaint in Concord Music Group v. X Corp. alleges that, for years, Twitter has allowed users to share copyrighted songs without a license. The suit also reveals that these music publishers attempted to notify Twitter of about 300,000 tweets with infringing music since December 2021. Each notice included links to thousands of specific tweets that used unauthorized copies of music. The complaint also acknowledges that “the plaintiffs in this case are not the only copyright holders whose works have been exploited without authorization on Twitter.” Each Twitter post incorporating a copyrighted work without the copyright holder’s permission, or a licensing agreement, infringes on the copyright holder’s exclusive right to distribute copies of their work. In a Senate Judiciary Subcommittee on Intellectual Property hearing, the Recording Industry Association of America equated Twitter’s infringement to “piracy on an industrial massive scale.”

Allowing Twitter to use unlicensed music gives the platform an unfair advantage over its competitors, including Instagram, Facebook, and TikTok. David Israelite, the president of the National Music Publishers’ Association, stated, “Twitter stands alone as the largest social media platform that has completely refused to license the millions of songs on its service.” Israelite went on to say, “Twitter knows full well that music is leaked, launched, and streamed by billions of people every day on its platform. No longer can it hide behind the DMCA and refuse to pay songwriters and music publishers.”

 Twitter has notoriously failed to enter into any of these blanket licensing agreements. When the company was bought by Elon Musk for $44 billion in ­­October, 2022, negotiations with Universal, Sony, and Warner completely halted. In a series of tweets, Musk expressed his feelings on current copyright law, stating that it goes “absurdly far beyond protecting the original creator” and that the Digital Millennium Copyright Act was a “plague on humanity.” 

In addition to the copyright infringement lawsuit, Musk was sued by Twitter for breach of contract in July of 2022 when he attempted to back out of the agreement to purchase Twitter. The company is also currently being investigated by the U.S. government for alleged violations of privacy and security agreements with the Federal Trade Commission.

Recent changes to Twitter and associated risks, including the decision to forgo licensing agreements with music producers, drove away advertisers and alienated some users. During the acquisition, Musk stated that his goal was for Twitter to become the most respected advertising outlet in the world and is a self-proclaimed “free-speech absolutist.” However, according to a study, the “average number of tweets per month declined by around 25% following [Musk’s] acquisition” of the platform. In a tweet, Musk revealed that Twitter’s advertising revenue has plunged by about 50%. This is because Twitter’s ad-portal traffic dropped by about 20%, and overall traffic and user engagement both dropped by about 6% since Musk’s acquisition.

Twitter’s failure to negotiate copyright licensing agreements customary to the social media industry has the company fighting a $250 million lawsuit and could lead to continued decline in user engagement and advertising revenue. Infringement will likely be established in the lawsuit because, under United States copyright law, “anyone who violates any of the exclusive rights of a copyright owner” is an infringer. Valid copyright holders have the exclusive right to distribute copies of their works, which includes posting protected works on social media. Injunctive relief, damages, and profits may be awarded to the plaintiffs in Concord Music Group v. X Corp. The Copyright Act of 1976 limits statutory damages to $150,000, but the plaintiffs are suing for $250 million based on the infringement of over 1,700 copyrights.

Mayson Plesko is a second-year law student at Wake Forest University School of Law. She holds a B.S. in Marketing and Law, Ethics, and Decision-Making from Indiana University’s Kelley School of Business. Mayson is the Online & Research Editor for Wake Forest’s Journal of Business and Intellectual Property. After law school, Mayson plans to practice business law in Tampa, FL.

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