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Spotify fails to block Daniel Ek deposition in dispute with Eminem publisher

By | Published on Friday 1 April 2022


A US court has said that Spotify chief Daniel Ek must participate in a deposition as part of the streaming firm’s ongoing legal battle with Eminem’s music publisher Eight Mile Style.

Legal reps for Spotify had tried to block an Ek deposition on the basis that he’s super busy and wasn’t hands-on involved in the licensing specifics this case centres on. They also implied that the plaintiffs were mainly pushing for the deposition just to piss Ek off.

Eight Mile Style sued Spotify in 2019 over allegations the streaming firm hadn’t properly licensed the rapper’s music for its US service and was therefore liable for copyright infringement.

The dispute specifically relates to the licensing of the mechanical rights in Eminem’s songs, which are subject to a compulsory licence under US copyright rules, which means the rates are set in law. However, for the compulsory licence to apply a streaming service must meet certain admin requirements.

Spotify and other digital firms were repeatedly accused of not meeting those requirements as streaming became the primary recorded music revenue stream in the US. As a result, there were a flurry of lawsuits over unpaid mechanical royalties in the mid-2010s, but the 2018 Music Modernization Act was meant to bring all that to an end.

It introduced a new mechanical rights collecting society – the MLC – which administers mechanical royalties in the absence of a direct deal between a service and a publisher. The services cover the costs of running the MLC in return for no longer being liable for any gaps in their song licences caused by admin screw ups, past or present.

However, that didn’t stop Eight Mile Style going legal over Spotify’s alleged past streaming of Eminem’s music without licence. Among other things, the publisher argued that Spotify hadn’t fulfilled its obligations under the MMA to avoid any new lawsuits over unlicensed songs. And also that the MMA stopping publishers from suing over past unpaid mechanical royalties was unconstitutional.

The case continues to go through the motions, and is currently due to arrive in court in September 2023. In the meantime, the plaintiffs want this deposition with Ek, which would see the Spotify chief have to answer their questions under oath.

Spotify have presented various arguments as to why that deposition should not take place. And the judge overseeing the case, Jeffery S Frensley, summarised those arguments in his ruling yesterday.

He wrote: “Spotify contends that [the Ek deposition should be blocked] because Mr Ek lacks personal knowledge of the issues in this case, deposing Mr Ek would result in annoyance, harassment, and undue burden and expense, and testimony on the topics that plaintiffs have identified is available from other witnesses”.

Countering, Eight Mile Style’s legal reps noted that Ek has spoken in the past about his personal involvement in launching Spotify in the US and the licensing deals required to achieve that, which included setting up the system for administering mechanical royalties that led to this dispute. And, in particular, the decision to work with the Harry Fox Agency on meeting all the administrative requirements of the mechanical rights compulsory licence.

Eight Mile Style has argued that HFA wasn’t actually equipped to do that work and – its lawyers insist – “no one else can testify to whether Mr Ek knew from the outset that HFA was not up to the task of securing mechanical licences at the scale Spotify required, and thus was not a commercially reasonable vendor”.

Generally speaking, Frensley is sympathetic to Eight Mile Style’s arguments on this point. And as for Spotify’s claim that an Ek deposition constitutes an “undue burden”, the judge wrote in his ruling: “The court is inclined to agree with plaintiffs that ‘Mr Ek’s entire argument for burden is, essentially, that he is busy'”.

“The court credits Spotify’s assertion that [Ek] is very busy indeed”, the ruling went on. “Yet, the issue of proper licensing relationships with the artists whose work comprises the entirety of Spotify’s business and its sole product is surely also a matter of importance to Spotify, worthy of some of Mr Ek’s time and attention”.

With all that in mind, Frensley has rejected Spotify’s motion to block the Ek deposition, although he did restrict the length of said deposition and added that Ek can answer any questions the plaintiffs want to ask remotely.

Spotify’s motion “is denied”, he stated, but “in recognition of the fact that Mr Ek has denied having personal knowledge of many areas of potential inquiry, and to minimise the likely annoyance to Mr Ek and the disruption of his schedule, plaintiffs may take the deposition of Mr Ek by remote means only for a maximum of three hours”.