Sat. Jul 20th, 2019

Warner Music vs. Spotify: India Launch Muddied As Court Defers Injunction Over Licensing Negotiations

The legal battle between Spotify and Warner Music Group over the streamer’s impending launch in India hit a few snags at Bombay’s High Court on Tuesday. A day after WMG filed for an interim injunction against the streaming service from using its publishing rights for its looming debut in the country, a court threw cold water on both parties, deciding that Spotify must pause its application for a statutory license, while also deferring the music company’s application for an injunction for a several-week period.

In other words, the court has sent Warner and Spotify back to their respective corners until a later date. If Spotify moves forward with launching in India before securing a license, the court has instructed the service to maintain an audit of all uses of Warner music, and to deposit any revenues with the court. As one industry source told Billboard, if Spotify launches during this limbo period, they’ll do so knowing the court hasn’t decided whether they’d be infringing on songwriters’ copyrights.

After Spotify issued a statement early Tuesday (Feb. 26) lauding the “court’s decision today to deny Warner/Chappell’s request for an injunction,” a WMG spokesperson disputed that interpretation, arguing the High Court’s decision is on hold for now.

“We welcome the Court’s decision to direct Spotify to deposit monies with the Court and to maintain complete records of any use of our music as well as all advertising and subscription revenue earned by Spotify,” Warner said in a statement. “These are positive steps to protect our songwriters’ interests. We’re also pleased that Spotify cannot pursue proceedings for their claim to a statutory license before the Intellectual Property Appellate Board for a period of 4 weeks.

“Our copyright infringement case will continue on an expedited basis.”

Warner also responded to Spotify’s earlier statements on why it was filing for a statutory license — typically meant for TV and radio broadcasters — rather than completing licensing negotiations for Warner’s recorded music and publishing (via Warner/Chappell) repertoire. Spotify claimed WMG’s “abusive behavior” harmed non-Warner rights holders and essentially prevented them from competing in the world’s second-most-populous country.

“Spotify’s comments yesterday about our fair market negotiations were appalling to us, and we’re shocked that they would exploit the valuable rights of songwriters without a license,” remarked a WMG spokesperson. “That said, we remain optimistic that we can reach a strong, balanced commercial agreement.”

As previously reported, Spotify is expected to launch its service in India imminently and has spent the past several months negotiating license deals with all three major labels, as well as the publishers, indies and local labels — including T-Series — that dominate the domestic market. It also secured a license with the local collecting society.

Spotify said this week that Warner/Chappell “remains the lone holdout needed” to launch in the country.

With negotiations ongoing, and no decision on a statutory license expected for four weeks, a Spotify launch during that window would seem unlikely, though not impossible. For their part, Spotify appears more than ready.

“We’re pleased with today’s outcome,” a rep said following Tuesday’s court ruling. “It ensures songwriters, artists, labels and publishers will benefit from the financial opportunity of the Indian market and that consumers will enjoy an excellent Spotify experience. As we’ve said all along, we’re hopeful for a negotiated solution with Warner based on market rates.”

Spotify first announced its plans to launch in India last March. A stock filing at the time reported that it had opened an office in Mumbai and hired 308 staff. Former OLX India CEO Amarjeet Singh Batra is understood to head the streaming platform’s Indian operations, although his appointment has never been officially confirmed.