Most antitrust claims survive against music lyrics provider

SAN FRANCISCO (CN) — A federal judge will allow the lion’s share of claims to proceed in an antitrust lawsuit against Musixmatch, a company that licenses lyrics to music platforms like Spotify and YouTube Music.

In the suit, competitor LyricFind accuses Musixmatch of violating state and federal law with anticompetitive and monopolistic behaviors.

The companies are two of the biggest in the $2.31 billion lyrics-licensing industry. U.S. District Judge Jacqueline Scott Corley, a Joe Biden appointee, on Wednesday denied Musixmatch’s bid to dismiss much of the lawsuit.

LyricFind claims that Musixmatch and its parent company TPG Global engaged in an illegal “buy-or-bury” strategy. Corley allowed the case to proceed, saying it was “plausible” that the company “furthered a scheme to restrain trade and commerce in the lyric data services market.”

A buy-or-bury scheme is an anticompetitive practice by which companies with more market power eliminate their competitors by acquiring them or driving them out of business. The practice is illegal under federal laws like the Sherman Anti-Trust Act and Clayton Anti-Trust Act.

Among the claims that survived dismissal were federal-level attempted monopolization claims, as well as state-level violations of the Cartwright Act, California’s antitrust law. But Corley dismissed some of LyricFind’s claims, including for breach of contract and monopoly conspiracy.

Musixmatch is based in Italy, and LyricFind is based in Canada. Musixmatch’s parent company, TGP Global, is a Texas private-equity firm.

Nonetheless, Corley ruled the companies had sufficient contacts in California for the case to proceed there. A remote hearing in the case is scheduled for Oct. 22.

In its March lawsuit, LyricFind said that in 2023, it was in negotiations to take over a lucrative contract with Spotify as Musixmatch’s contract to supply lyric data to the platform was ending.

Fearing that possibility, LyricFind says Musixmatch engaged in a buy-or-bury scheme.

Musixmatch attempted to buy LyricFind, but the two sides were unable to agree on a deal. Negotiations ended in December 2023. Then, LyricFind claims Musixmatch leaked confidential and NDA-protected information in an attempt at sabotage.

Musixmatch also entered into an agreement with music publisher Warner Chappell Music, giving the company exclusive rights to provide lyric data for all the publisher’s titles. As a result, LyricFind says it could not provide data for approximately 30% of streams.

LyricFind says that exclusivity agreement disrupted its relationship with Spotify, which ultimately stayed with Musixmatch. The company filed suit, claiming anticompetitive practices and seeking punitive damages. Attorneys for both sides did not respond to requests for comment by press time.