The MLC Sues Pandora for Unpaid Royalties

The Mechanical Licensing Collective (The MLC), a nonprofit organization that administers the mechanical blanket license for digital audio services in the U.S., has filed a lawsuit against Pandora Media, LLC (Pandora), one of the largest music streaming platforms in the country. The MLC claims that Pandora has failed to report and pay all of the mechanical royalties it owes to songwriters and publishers for the use of their songs on its ad-supported service, Pandora Free.

What is the mechanical blanket license?

The mechanical blanket license is a compulsory license that allows digital audio services to stream or download any musical work available in the U.S. without having to obtain individual licenses from each song owner. The license was established by the Music Modernization Act of 2018, a landmark legislation that aimed to reform the music licensing system and ensure fair compensation for songwriters and publishers.

The MLC is the sole entity authorized by the U.S. Copyright Office to administer the mechanical blanket license. The MLC collects royalties from digital audio services that obtain the license, and distributes them to song owners who register their works with The MLC.

Why did The MLC sue Pandora?

According to the complaint filed by The MLC on Monday, February 12, 2024, Pandora has obtained the mechanical blanket license to enable its consumer music streaming platform, which includes both a subscription-based service (Pandora Plus and Pandora Premium) and an ad-supported service (Pandora Free).

However, The MLC alleges that Pandora has failed to report and pay all of the mechanical royalties it owes in connection with the operation of Pandora Free, which accounts for more than 80% of Pandora’s total monthly active users. The MLC says that it has repeatedly raised this license compliance issue with Pandora and asked it to correct its reporting, but Pandora has refused to do so.

The MLC is seeking to recover the unpaid royalties, as well as statutory damages, interest, and attorneys’ fees. The MLC says that it is taking legal action to ensure that its Members, which include more than 1.8 million songwriters and publishers, receive all the mechanical royalties they are due in connection with the use of their songs by Pandora.

What are the implications of the lawsuit?

The lawsuit is the first legal action taken by The MLC since it began its operations in January 2021. It reflects The MLC’s commitment to enforce the terms of the mechanical blanket license and protect the rights and interests of its Members.

The lawsuit also highlights the challenges and complexities of the music licensing system, especially in the digital era, where music consumption and distribution are constantly evolving. The MLC says that it is working with other digital audio services to ensure that they comply with the license requirements and report and pay royalties accurately and timely.

The lawsuit has been filed in the United States District Court for the Middle District of Tennessee, located in Nashville, the home of The MLC and a major hub for the music industry. Pandora will have an opportunity to respond to the complaint, after which the court will set and manage a case schedule for the proceeding.

Amy H.