Freeplay Music Called Shakedown Plot

LOS ANGELES (CN) - After luring people with ads for free music, Freeplay Music shakes them down for "outrageous" license fees, ""a 'bait and switch' followed by extortion," the publisher of Variety magazine claims in court.

Penske Media Corp. and Variety Media sued Freeplay Music on Sept. 2 in Federal Court.

Freeplay, which offers "Free Music for YouTube and More" on its website, is one of the first sites displayed in a Google search for "free music," according to the complaint.

(On a Google search for "free music" Tuesday morning, Freeplay was sixth on the list. Large font at the top of its page proclaimed: "15,000 Songs: Free Music for YouTube and More. The Sound of Your Next Project Starts Here.")

Penske and Variety call it a trap for unsuspecting consumers.

Variety began as a weekly in 1905 and became a daily in 1933 as the movie industry expended. Penske Media bought it in 2012 and stopped print publication in 2013, becoming an online entertainment news source.

"After luring in unsuspecting consumers with the promise of 'free' music, Freeplay then encourages these consumers to use the music, including in their own YouTube videos," the lawsuit states. "After the consumer follows Freeplay's advice, Freeplay then traps the consumer by demanding that the consumer pay outrageous 'license fees' for the use of music that was supposedly 'free.'"

Penske and Variety say they received "shakedown" demands from nonparty TuneSat after they refused to pay the license fees.

TuneSat tracks online music sources to collect license fees. The lawsuit describes TuneSat as "ostensibly a third party 'monitoring' the web for supposed infringement on behalf of Freeplay."

It continues: "In fact, both TuneSat and Freeplay were founded by Scott Schreer, the current CEO of both. Both TuneSat and Freeplay coordinate with one another in this deceptive scheme perpetrated on content creators."

Penske claims Freeplay's "business model" is deliberately deceptive.

"Unlike most content owners, once a consumer uses Freeplay's music in a fashion Freeplay deems to be 'illegal,' Freeplay does not simply issue a takedown notice and request that the consumer remove the content," complaint states. "Instead, Freeplay sends the consumer a shakedown demand, threatening litigation if the consumer does not pay Freeplay an outrageous 'license fee.'"

In addition to running Freeplay and TuneSat, Schreer writes theme songs for TV shows, including "NFL on Fox" and other Fox shows, according to industry publications. He claims six Emmy nominations. ESPN The Magazine called Schreer one of the "kings of the sports jingle," in February.

Penske claims that Freeplay "unilaterally altered its confusing and contradictory" terms of use in October 2014, prohibiting free use of its music on YouTube. That sudden change brought about its "aggressive demands" for money, according to the lawsuit.

"In making these outrageous demands, Freeplay refuses to identify to the target of the shakedown all of the allegedly infringing content," the complaint states. "This is not how a business that wishes to legitimately license and protect its content would behave. But Freeplay is not really in the content license business. Freeplay conducts its business in a very different manner - a 'bait and switch' followed by extortion."

Schreer is not named as an official party in the complaint.

"Had Freeplay engaged in truthful advertising, and been upfront to the consumer regarding these 'license fees,' it is highly doubtful the consumer would have utilized this "free" music in the first place," Penske claims.

Penske and Variety "firmly deny that they infringed upon any copyright allegedly belonging to defendant."

None of the companies responded to requests for comment.

Penske and Variety seek declaratory judgment, an injunction against unfair competition, restitution and costs.

They are represented by Bryan Freedman with Freedman + Taitelman.

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