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Court Doesn't Buy Pandora's Antitrust Argument Against Comedy Content Licensor

The U.S. District Court for the Central District California dismissed an antitrust allegation counterclaim by Pandora Media in litigation involving several lawsuits filed against it alleging non-payment of royalties for use of the literary content of the routines of such comedians as Lewis Black and the late Robin Williams that consumers can access on Pandora's streaming service. (Pandora does pay royalties for use of the comedy sound recordings.) In re Pandora Media LLC Copyright Litigation, 2:22-cv-00809. Pandora hurled its antitrust counterclaim against the comedians and their licensing agent Word Collections, which enters into exclusive "affiliation agreements" with the artists that enable Word to charge the same licensing fee for each comedian's content. Word in turn demands a 25% royalty rate under a blanket license for use of the comedy routines. Central District Judge Mark C. Scarsi noted: "Pandora alleges that these exclusive affiliation agreements amount to a conspiracy, whereby Word Collections and the Comedians have agreed not to license 'independently outside of the cartel.' Word Collections represents many different comedians, making the Word Collections portfolio 'dangerously close' to a must-have if a service wants to offer comedy streaming. Pandora alleges that this demonstrates Word Collections' monopoly power and permits Word Collections to make itself the go-to entity for comedy performances." Word sought to have Pandora's counterclaim dismissed on the ground that Pandora hadn't sought individual licenses for the comedy routines. Denying the motion, though, District Judge Scarsi emphasized, "It is enough that Pandora has plausibly alleged Word Collections requires a blanket license for access to its literary works." However, the district judge went on to dismiss Pandora's monopolization, price-fixing conspiracy and tying claims against Word by noting about the monopolization allegation, for example: "Even though Pandora adequately defines a relevant market, Pandora offers no allegations that Word Collections owns a dominant share of the market or that there are significant barriers to entry in the market. … Pandora's description of Word Collections' impressive but short list of comedians whose works it licenses does not suffice to demonstrate that Word Collections owns a dominant share of the comedy recording market in the United States. Importantly, nothing in the counterclaim gives any indication of the size of the market (although the size of Pandora's own catalog casts significant doubts on Word Collections' dominance in the market)."

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