US collecting society Pro Music Rights has said it is “exploring legal action” in response to “false and defamatory statements” included in a letter Congress member Scott Fitzgerald sent to the Federal Trade Commission earlier this week.
It may also go legal over “coordinated efforts by legacy performing rights organisations”, including BMI, to “suppress independent competition in the US music licensing marketplace”.
Pro Music Rights is one of the smaller collecting societies that represents the performing rights of songwriters within the US market. In his recent letter, Fitzgerald urged the FTC to investigate whether Pro Music Rights is violating US laws relating to unfair or deceptive practices, based on allegations that - while the rights organisation “feigns legitimacy” - it is misrepresenting the catalogue of songs it represents.
In a lengthy statement responding to Fitzgerald's FTC letter, Pro Music Rights says it “categorically rejects the recent Congressional letter, which contains politically motivated, factually inaccurate assertions about our business, our repertoire and our commitment to independent music creators”.
That letter, the rights organisation adds, “perpetuates false narratives advanced by entrenched industry interests whose efforts historically aim to preserve dominance, reduce payments to creators and marginalise innovative competitors”.
Earlier this year the US Copyright Office undertook an inquiry into why there are now six collecting societies representing the performing rights of songwriters in the US, and the impact that has on licensees that want or need licences that basically cover all music.
That inquiry was prompted by an earlier letter from Fitzgerland and other Congress members. The new letter to the FTC follows on from the Copyright Office’s conclusion of its inquiry last month and cites submissions that were made to the inquiry.
In the new letter, Fitzgerald highlights concerns that have been raised about two of the smaller US performing rights organisations - Pro Music Rights and AllTrack. That’s in part based on BMI’s submission to the Copyright Office’s investigation.
In that submission, BMI said it “appreciated” concerns raised by various music users that it can be hard to ascertain what specific songs Pro Music Rights and AllTrack represent, and therefore whether or not their respective licences are worth having.
BMI wrote that “Pro Music claims an estimated 7.4% share of the performance rights market based solely on the estimated 2,000,000 works in its repertory”, which - it said - includes “music purportedly generated through Pro Music’s artificial intelligence programme”.
That market share stat, BMI added, means Pro Music “claims to have rights in more songs than the combined repertoires” of SESAC and GMR, the two more established smaller PROs operating in the US.
But even if that’s true, BMI's submission went on, Pro Music’s market share claim is still misleading, because the relative value of any one collecting society’s catalogue depends more on what percentage of total performances it accounts for, rather than the percentage of works in existence.
BMI then went on to allege that, while Pro Music Rights does allow users to search its “purported repertoire” via its website, it does so in an unhelpful way.
BMI’s submission to the Copyright Office also brought up the previous legal battle between Spotify and Sosa Entertainment, the record label set up by Pro Music Rights founder Jake P Noch. During that litigation, which was fought out between 2019 and 2021, Spotify accused Noch’s label of streaming fraud, something he denied.
Pro Music Rights’ statement rejects all of BMI’s criticisms. It insists it “has consistently and transparently disclosed its licensing practices, market share estimates and repertoire information in official filings and public statements”.
As for Fitzgerald’s letter, it goes on, any assertion that the rights organisation or Noch “feigns legitimacy” or engages in deceptive practices is “false, defamatory and unsupported by the factual record”.
The Congressman’s letter, it adds, “cherry-picks” criticisms made by Pro Music Rights’ rivals during the Copyright Office inquiry, while “disregarding the Office’s own findings”: the Copyright Office “expressly declined to recommend radical restructuring of the PRO marketplace, emphasising the need for more robust data and transparency rather than fewer competitors”.
According to its statement, Pro Music Rights is considering defamation and antitrust litigation in response to Fitzgerald's letter and submissions made to the Copyright Office by BMI and others.