Lyrics aggregator Musixmatch has formally responded to litigation filed by its competitor LyricFind over an exclusivity deal Musixmatch agreed with music publisher Warner Chappell, which its rival says is anti-competitive. LyricFind is just a bitter “jilted competitor”, Musixmatch claims, filing a “meritless” antitrust lawsuit just because it failed to secure its own deal with the Warner publisher.
LyricFind hasn’t sued Warner Chappell itself, Musixmatch notes in a new court filing, and for good reason. Because the publisher “indisputably has the right to exclusively license and distribute its intellectual property as it sees fit”. Having failed to “convince Warner Chappell to do business with it”, LyricFind has gone legal, “hoping it can obtain through litigation what it was unable to win in the marketplace”.
Both Musixmatch and LyricFind aggregate and license lyrics across the music industry. They then provide clients - including streaming services and other digital platforms - with those lyrics under their licences from the relevant rightsholders, including songwriters and music publishers.
Traditionally aggregators have all secured licences from the same publishers and then competed to secure relationships with clients based on the products and services they can provide around those lyrics.
However, when Musixmatch entered into an exclusivity deal with Warner Chappell, that meant LyricFind couldn’t include lyrics owned or co-owned by the publisher into its offer to streaming services.
In its lawsuit earlier this year, LyricFind alleged that Musixmatch pushed for an exclusivity arrangement with the Warner publisher because it knew one of its biggest clients, Spotify, was considering moving to LyricFind. By depriving LyricFind access to Warner’s lyrics, Spotify no longer wanted to change its lyrics provider.
Musixmatch actually wants LyricFind’s lawsuit dismissed on simple jurisdiction grounds without the judge even considering any of the competition law arguments around its deal with Warner Chappell.
LyricFind has filed its case in the Californian courts, despite it being a Canadian company and Musixmatch being based in Italy. And even more importantly, Musixmatch’s Warner deal is specifically with Warner Chappell UK, set out in a contract “subject to the laws of England and Wales”.
The new court filing says that LyricFind’s lawsuit incorrectly assumes that Musixmatch’s deal is with Warner Chappell’s California-based US company, and also incorrectly asserts that Musixmatch has an office in California. In fact, it explains, “Musixmatch never had an office in California or anywhere else in the United States”.
“Stripped of these incorrect and now rebutted assertions”, the filing goes on, LyricFind’s case for fighting this legal battle in California is based on “boilerplate allegations of Musixmatch doing business with unspecified third parties in California ungrounded in any supporting factual allegations and untethered from any explanation of how they relate to LyricFind’s claims or alleged harm”.
However, should the Californian court decide it does have jurisdiction over this dispute, it should dismiss LyricFind’s lawsuit anyway, Musixmatch argues. Because its rival fails to demonstrate that its exclusivity deal with Warner Chappell constitutes “substantial foreclosure” - which, in the context of antitrust law, would mean the deal significantly restricts its competitors’ access to market.
Musixmatch presents various arguments as to why its Warner Chappell deal does not violate antitrust laws at either a US-wide federal level or within the state of California.
It says that LyricFind has failed to allege that Musixmatch’s Warner deal runs for an unreasonably extended duration; and has failed to properly define what market LyricFind is being blocked from as a result of the deal.
Also, LyricFind has admitted that streaming services can actually work with multiple lyric aggregators at any one time, meaning a digital platform could access Warner lyrics from Musixmatch and everything else from LyricFind.
All of which means LyricFind has failed to “plausibly allege it has been foreclosed from competing for a ‘substantial share’ of any relevant market”.