Home > Uncategorized > A2IM Joins the Fight Against Monopolist YouTube’s Notice and Shakedown Dirty Tricks

A2IM Joins the Fight Against Monopolist YouTube’s Notice and Shakedown Dirty Tricks

June 12, 2014

As MTP readers will recall, YouTube has finally overplayed its monopoly and tried to extract concessions from independent labels to license for a completely different service by threatening a cutoff from YouTube.  And, of course, when YouTube says “cut off” from YouTube, what they mean is they will still let “user generated content” created from the indie labels artists flow onto their system, it just won’t be monetized.

I leave it to you to decide (1) where in the law it says that Congress intended the DMCA notice and takedown was intended to be used in this manner (as YouTube is clearly on notice of their own making that the indie labels did not authorize this UGC, thus arguably self-trumping the knowledge predicate), (2) why YouTube election to just take the traffic and not sell ads for Asian brides against the videos somehow insulates Google from prosecution, and (3) whether YouTube employees might be seeding YouTube with the indie label content just to make the monopolists point–cross Google and it will screw you so hard you can’t walk.  And while you’re at it, you can also decide if Google has committed a crime under the Sherman Act.

Thanks to A2IM, that last bit may have gotten a little easier.  A2IM has filed a complaint with the Federal Trade Commission–one of the few entities in the U.S. music industry to actually challenge Google anywhere it could hurt.  Here’s the relevant part of the complaint, but I urge you to read it in its entirety for yourselves:

YouTube is a dominant Internet source of music with approximately 80% of Internet users engaging with YouTube for video streaming [due in no small part to YouTube being subsidized by Google's own monopoly rents from search]. As you know, YouTube has been a wholly owned subsidiary of Google since 2006. YouTube is expected to launch anew audio music streaming service to compete with established services such as Pandora and Spotify, and is attempting to force contract terms upon the Independent sector which we understand from our members are significantly inferior to those offered to the international non-U.S. owned‘major’record companies (Sony,Warner and Universal).

Our members have been informed that if they do not sign up to these revised terms,YouTube has given notice to them that YouTube will remove/block our members’ and their artists’ musical repertoire from the entire YouTube service,not just the new audio music streaming service. As YouTube is one of the leading music outlets the effect on our members on the promotion and monetization of their artists will be severe as the premium videos our members create will be blocked and the User Generated Content videos created by consumers using our members artists’ music [or more like copied whole] will cease to be monetized via advertising. Our members will then be forced to engage in the“whack-a-mole” process of getting these non-monetized videos off of YouTube, so as not to detract attention from services that are paying our Independent members, as was not anticipated when Congress enacted the DMCA in1998.

According to our members,the terms currently on offer to Independent companies from YouTube are non-negotiable and highly unfavorable, and in many cases,unworkable (for example insisting on global rights which the Independent may not be able to grant). They also undermine existing rates in the marketplace from music streaming partners such as Spotify, Rdio, Rhapsody and others but are reportedly planning to launch their service charging consumers a subscription fee similar to or at the same rate as what these competitor services charge. All of these competitor companies chose to pre-license Independent content at terms which are comparable to the majors, something which YouTubehas never attempted to do.

If this threatening and intimidating behavior does not stop, the implications are very serious, not only for the music industry, but for all creative and rights based industries.  We face the very real prospect of all internet based trade in creative output being controlled by three non-U.S.owned companies who seem intent on taking as much value for themselves, and passing as little value as possible back to those companies and artists creating the very content onwhich their businesses are built, and are dependent upon, to the detriment of our primarily U.S.owned and based Independent membership. There are parallels in the book retailing world: it is now a matter of public record that Amazon is punishing publishers who refuse to sign new terms which amount to a transfer of value, not a benefit to the consumer.

Google has shown little willingness to play fair on issues such as tax responsibility, and it now shows a similar lack of regard for cultural diversity and creativity and marketplace access.  We would argue that a dominant player such as YouTube forcing SMEs to accept lower rates than non-SMEs constitutes abuse of a dominant position,with regard to the digital music and video streaming market.

We ask the U.S. Government to urgently intervene, in order that other creative sectors are not forced into expensive and wasteful litigation against dominant players such as Google.  We call on the U.S. Government to provide injunctive relief to prevent YouTube from blocking these Independent companies from their music platforms while our members seek a commercial solution. [Emphasis mine.]

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