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Webcasters Sue Music Companies

August 28, 2003|From Bloomberg News

The Recording Industry Assn. of America, a trade group for music companies battling song swapping, was accused in an antitrust lawsuit of charging high fees to groups that broadcast music over the Internet.

Webcaster Alliance Inc., whose 400 members transmit music to individual listeners over the Internet, filed the lawsuit in federal court in San Francisco saying the RIAA-negotiated licensing fees that independent Internet radio stations pay to play copyrighted songs are unreasonably high and intended to restrain competition.

AOL Time Warner Inc., Sony Corp. and other music companies, represented by the Washington-based RIAA, say that file-sharing costs them billions of dollars in lost sales each year. RIAA has sued to shut down Napster Inc. and other song-swapping sites and plans to sue individual consumers who make music available to others on the Internet.

Internet radio licensing fees are "raising the barrier to the point where they will drive independent Internet radio operators out of business," which helps protect large commercial Internet radio businesses such as AOL Radio Networks, said Perry Narancic, an attorney for the Webcaster Alliance.

"This lawsuit is a publicity stunt that has no merit," said Jonathan Lamy, a spokesman for the RIAA.

"Record companies and artists have worked earnestly and diligently to negotiate a variety of agreements with a host of new types of radio services, including commercial and noncommercial Webcasters."

The lawsuit seeks to suspend the licensing fees until more reasonable prices can be negotiated.

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