Pop Courts Review 2021: Part One

Published on Monday 3 January 2022

So, I write an awful lot in the CMU Daily about things happening in the pop courts, which is to say legal battles involving musicians and music companies, or which impact in one way or another on the music business.

Given a new year is upon us, I thought I’d pick some of the most interesting happenings in the pop courts over the last twelve months, most of which are likely to appear in the CMU Daily on a regular basis throughout 2022.

I’ve picked six in total and write about three of them here. I’ll do another post with some musings about the other three soon.


One of the most interesting legal disputes working its way through what I call the ‘pop courts’ this year isn’t even a music industry case.

But it is hugely relevant to the music industry, partly because it is being closely followed by Spotify, but also because of the impact it could have on the next phase of the all important direct-to-fan revolution.

The Epic Games v Apple litigation in the Californian courts centres on something we’ve been covering for years, the so called Apple Tax.

If you provide services via an app on any iOS device – like an iPhone or iPad – you are subject to Apple’s App Store rules. An important rule relates to in-app payments. For many apps, such payments have to be taken via Apple’s proprietary transactions platform, which charges a 15-30% commission.

Not only that, but the app maker is not allowed to direct users to where they can make payments outside of the app, for example on a website.

This has always been a major problem for any music service like Spotify, which already pays more or less 70% of its revenues to the music industry.

So, paying Apple a 30% commission wipes out the profit margin. And while it is true that the commission would drop to 15% after a subscriber had been signed up for a year, that’s still a significant portion of Spotify’s cut of any subscription money being handed over to Apple.

Given that’s not viable, Spotify has two other options. First, pass the 30% on to the customer, so that anyone who signs up for Spotify within the app pays £12.99 a month instead of £9.99.

But that’s annoying. Especially when Spotify’s main competitor in music streaming is a certain Apple Music, which doesn’t have the Apple Tax problem. Which means it would look like Apple’s music service was three pounds a month cheaper within the iOS ecosystem.

The other option is to just not allow in-app purchases. If a user buys a subscription on Spotify’s website, Apple isn’t involved, even if the subscriber then accesses the Spotify service via the iOS app.

However, remember, Spotify isn’t allowed to include any links within its app directing people to the payment page on its own website, meaning the user has to work out for themselves where to go and buy a subscription.

This is particularly annoying for a company where the main business model is based around hooking people in with a free version of the service and then trying to upsell them a premium subscription.

Having moaned about all this for years, Spotify took formal action in 2019 by filing a complaint with the European Commission, on the basis that Apple’s App Store rules constitute anti-competitive conduct that violates European law. The EC’s investigation is ongoing, although its investigators have indicated they too have concerns about the App Store rules.

Meanwhile, Fortnite maker Epic Games formally launched its battle with Apple over the App Store rules in 2020, launching a major PR campaign explaining to its huge community of avid (and often quite young) gamers around the world why Apple is evil, while also filing lawsuits in courts in multiple countries. The big lawsuit was the Californian case.

That arrived in court in 2021. Actually, the judge hearing the case rejected many of Epic’s arguments as to why Apple’s App Store rules breach American competition law. However, she also issued an injunction ordering Apple to start allowing all app-makers to be able to at least direct users to alternative payment systems online, usually on their websites.

Epic, of course, really wants to take in-app payments through its own transactions system. But being able to to include a button directing people to a payments page on its website is nevertheless a major improvement on the current situation, so the injunction was a pretty big development.

However, both Epic and Apple are appealing the wider judgement in the case, and therefore the latter argued that the injunction on alternative payment links should be paused, pending the outcome of the appeal. Even though that appeal could take years to work its way through the system.

The judge hearing the case refused to put her injunction on hold, however Apple went to the appeals court and got the lower court’s order paused there instead. Which was annoying. For Epic.

Actually, for Spotify, that injunction wasn’t so important. Because while the Epic v Apple case was going through the motions, the App Store rules were also the subject of an investigation by the Fair Trade Commission in Japan.

And as part of a settlement with that Commission, Apple agreed to allow so called reader apps all over the world to include alternative payment links from 2022. And so called reader apps include Spotify.

Which means Spotify is now in a better position than Epic when it comes to all this. Although, needless to say, it too would really like to take payments directly through its iOS app, rather than requiring uses to click on a link and open up a web page on their smartphone.

Meanwhile, as I said, this whole thing has a much bigger impact on the music industry than just what it means for Spotify. And that’s because of the ongoing evolution of direct-to-fan services, where artists generate extra income by providing extra products and services to the core fanbase.

It seems to me that direct-to-fan remains an under-tapped opportunity in the music industry, but I think that is finally starting to change. And that’s partly because the direct-to-fan proposition is changing.

Whereas to date direct-to-fan has been mainly about selling CDs, vinyl and merchandise direct to fans via an online store – with possibly some fan-funding and pre-order fun times thrown in – increasingly D2F is about selling premium digital content and experiences.

The lesser known streaming service Audiomack recently added some interesting new direct-to-fan monetisation tools, via which fans can pay to specifically ‘support’ their favourite albums and tracks.

That support will then be publicly acknowledged for all to see within the Audiomack app; fans will be given ‘shareable trophies’ so that they can brag about their supporter status on social media; and artists will be able to directly message those fans that provide such support.

Now, I’ve no idea whether that will work, though compared to the lacklustre direct-to-fan tools that have been provided by Spotify over the years – mainly buttons linking to merch sales – it does seem better designed for the TikTok generation. But there are some issues.

For starters, there are copyright issues I won’t even begin to discuss. But also, if a fan provides their support via Audiomack’s iOS app, well, 30% of the money will go to Apple.

And there are plenty of other in-app direct-to-fan opportunities arguably held back by the Apple Tax – and, I should add, the equivalent rules and commissions on Google’s Android platform.

If Epic and Spotify do ultimately manage to get the App Store rules changed across the board, those opportunities will become more attractive to and more lucrative for those artists who reckon they have fanbases suitable for direct-to-fan products like those being tested by Audiomack.

Check the CMU coverage of Apple v Epic here.


This would be an interesting case in any year, not least because most of the previous sales v licence digital royalty lawsuits having been fought in the US. But in the context of the UK Parliament’s headline-grabbing economics of streaming inquiry and Kevin Brennan MP’s subsequent private members bill, this British lawsuit has proven to be especially news-worthy.

The key question here is what royalty an artist signed to a record label should receive when their music is streamed but their record contract pre-dates and therefore doesn’t mention streaming.

Under conventional record deals, the label owns the copyright in any recordings made, but agrees to pay the artist a cut of any money those recordings generate. But, crucially, what cut the artist receives often differs depending on how a recording has been exploited.

A common distinction in conventional record contracts is made between sales revenue streams – for example selling a CD – and licensing revenue streams – for example licensing a track for synchronisation into a movie.

In the late 1990s, the royalty rate on the former was often 15%, while on the latter it was 50%. When the first digital music services started to emerge a big question was posed: should digital be treated as a sale or a licence?

Now, clearly the deals done between the record labels and the iTunes Store – and subsequently the deals done with Spotify and Apple Music – are licensing deals, so many artists and managers argue that the higher licence royalty should be paid on that revenue stream.

But many labels have nevertheless applied a sales royalty to digital revenues, including downloads and streams (in some cases whatever the CD rate was, although some labels do pay a slight premium on streams).

This led to a bunch of litigation in the 2000s, mainly in the US, the most famous being the lawsuit successfully pursued by Eminem producers the Bass Brothers – aka FBT Productions – against Universal Music.

There were some class actions too involving all three major record companies, although in most cases those only resulted in artists getting a slightly higher royalty on digital than they do on discs (ie, as with some indies, the labels pay a slight premium on digital).

In late 2020, Four Tet sued his former label Domino over his 2001 record deal, arguing that he should be getting a licence royalty of 50% on some or all of his streaming income, rather than a sales royalty of 18%.

Although, unlike some of the earlier sales v licence cases which involved pre-2000 record deals, that 2001 contract did specifically mention a royalty rate for downloads – that being the 18% – making this case slightly different, ie the real question is: should a download rate also apply to streams?

As the dispute rumbled on, Domino removed the Four Tet albums it owns from the streaming services. The label also offered to pay Four Tet what he would have been due had the 50% royalty applied on past streams, albeit while maintaining that his interpretation of the 2001 record deal was incorrect. Those various moves were seemingly an attempt to kill the lawsuit.

The argument went: if that voluntary one-off payment was made and the albums were then no longer streaming, there’d be no active dispute for the court to consider, meaning the lawsuit should be dismissed.

Except that would mean we wouldn’t get a judicial opinion on the core contract dispute regarding streaming royalties. Plus Four Tet’s three albums would be permanently unavailable on the streaming platforms.

It’s debatable whether that was a clever legal move or not. Four Tet is now amending his lawsuit to include an additional breach of contract claim against the label in relation to the album takedowns. Although the judge hearing the case declined to allow a second new claim to be added, one of restraint of trade (something that has come up in record deal disputes in the past).

Meanwhile, with these extra complexities added to the dispute, the case may have to move from a special IP court to the main high court. That would potentially open up Four Tet to much higher financial liabilities if he loses, meaning he might have to abandon the lawsuit entirely.

What is certain though is that Domino removing the Four Tet albums was a disaster in PR terms. And it greatly strengthens the arguments coming from the likes of the #brokenrecord and #fixstreaming campaigns that many labels can’t be trusted to do the right thing when it comes to sharing digital revenue with artists – and that therefore copyright law should intervene. Which is what Brennan’s private members bill sought to do.

Now, Brennan’s bill basically faltered, which was no surprise. However, the UK government has convened a music industry contact group and commissioned research to consider various proposals made by Parliament’s culture select committee, which includes many of the proposals in Brennan’s bill.

So the debate over how streaming monies are shared out across the music community will very much continue in 2022 – and the ongoing Four Tet v Domino dispute will be very much part of that debate.

Check CMU’s coverage of Four Tet v Domino here.

Check this CMU Timeline of Parliament’s Economics Of Streaming inquiry.

Section 7.1 of ‘Dissecting The Digital Dollar’ discusses the various debates around the division of streaming revenue – buy a copy of the book here.


Now, these should probably be treated as 2022 cases, given they’ve only been filed in the last two months, and – while the behind the scenes legal wrangling is underway – we are still in the very early stages of the litigation.

Plus there are still lots of unanswered questions about what exactly happened on the night of Friday 5 Nov at Houston’s NRG Park, and it would be wrong to speculate too much while a criminal investigation is still underway.

However, with hundreds of lawsuits filed in the Houston courts and billions of dollars in damages being claimed, it’s hard to ignore the legal fallout of the Astroworld tragedy. And while most of those questions about logistics and liabilities can’t be answered yet, there have already been some very interesting legal debates in relation to these cases.

Ten people died and hundreds more were injured when a crowd surge occurred at Astroworld during the headline set of Travis Scott, the rapper who founded the festival, which was promoted by Live Nation and its Houston-based Scoremore subsidiary.

The families of those who died, many of those who were injured, and other festival-goers who suffered emotional distress are seeking to hold Scott, Live Nation and Scoremore – among others – liable for the tragedy.

The aforementioned and ongoing criminal investigation is scrutinising to what extent, or not, decisions made by the event’s organisers before or during the festival contributed to the crowd surge.

Some have actually questioned whether the Houston Police Department is really best positioned to run that investigation – given it was involved in policing the festival – but so far the city’s police chief has successfully resisted calls for any sort of independent inquiry.

Scott’s legal team is, unsurprisingly, seeking to have him removed as a defendant on all the lawsuits. The argument is that Scott was unaware that a dangerous crowd surge was unfolding before him as he performed his Astroworld set, which continued for more 30 minutes after police had declared a mass casualty event.

Nor could he have been expected to know about or anticipate the tragedy, his team’s argument goes on, because while he may have founded the festival, it was the job of the promoters and their suppliers to run the show, control the crowd and ensure everyone’s safety.

All of that is true, of course, although Scott being the founder of Astroworld adds a very interesting extra element to the cases.

Because he has long been known for staging particularly raucous live shows where he actively encourages his fans to “rage”. Now, while “raging” is a somewhat ambiguous term, some would argue that Scott actually has a history of encouraging his fans to behave in a reckless way at his shows.

Indeed, the rapper has actually faced charges in the past for encouraging such reckless behaviour. And a lawsuit is still going through the motions in relation to significant injuries incurred by a fan called Kyle Green, who was knocked off a balcony at New York’s Terminal 5 venue after Scott allegedly encouraged some extreme crowd surfing during a 2017 show.

Lawyers leading on the Astroworld lawsuits might argue that the Travis Scott brand – and by association his festival’s brand – were built around messaging that encouraged fans to behave in a reckless way.

And, that argument will likely go, if you build a brand around that kind of messaging, maybe it is inevitable – or, in legal terms, ‘foreseeable’ – that eventually someone is going to get hurt.

Indeed, given Green’s injuries in 2017, that had already happened, and maybe that means everyone involved in Scott’s live career had already been put on notice that something even worse was likely to happen.

Now, obviously it’s for a court of law to decide whether that kind of argument is valid and relevant in terms of assessing the liabilities – or not – of Scott, Live Nation and Scoremore when it comes to the deaths, injuries and other harms caused by the Astroworld crowd surge.

But it’s arguments like this that will make the Astroworld lawsuits fascinating as they work their way through the system in 2022.

Check CMU’s coverage of the Astroworld tragedy and lawsuits here.

Check this edition of Setlist where we discuss the Astroworld litigation.

Still to come:

Sony Music v Gymshark
Nike v Lil Nas X
The Shake It Off lyric theft dispute