The authorized battle between LyricFind and its rival lyrics aggregator, Musixmatch, now has a geopolitical edge.
That’s in response to current court docket paperwork seen by MBW.
An amended authorized criticism from LyricFind, filed in California on October 24 (learn it right here), as soon as once more confirms that TPG – having acquired a controlling stake in Musixmatch in July 2022 – then thought of buying LyricFind as effectively.
In keeping with the criticism, TPG and LyricFind entered right into a non-disclosure settlement to discover the acquisition of LyricFind on January 12, 2023.
TPG allegedly gained entry to LyricFind’s confidential enterprise info throughout this due diligence course of.
Nonetheless, the amended criticism confirms that the TPG/LyricFind acquisition negotiations collapsed eleven months later, in December 2023.
Why? That’s a matter of debate.
LyricFind’s criticism alleges that TPG and Musixmatch “wrongfully leaked” confidential details about its agency to Spotify in January 2024 – a month after sale talks stalled.
Particularly, it alleges that TPG “falsely” knowledgeable Spotify that LyricFind had “purportedly violated worldwide sanctions associated to Russia and purportedly hid its enterprise dealings from regulators”.
LyricFind states these allegations had been “not solely a transparent breach of [a mutually signed] NDA” but additionally “grossly and knowingly misrepresent[ed]” info “to attempt to hurt LyricFind’s aggressive place”.
The Russia connection
The Russia-related allegation on the middle of the dispute might relate to VKontakte (VK), the biggest social media supplier in Jap Europe.
In keeping with a purported press remark from a VK spokesperson in January 2023, a brand new lyrics function on VK Music and different VKontakte providers required rightsholders to submit their lyrics to LyricFind.
At the moment, LyricFind was named as “the service that gives the lyrics” to VK.
When requested by MBW concerning the amended criticism and LyricFind’s historic hyperlinks to VK, an organization spokesperson mentioned: “As we allege in our amended criticism, TPG did attempt to purchase LyricFind in 2023. When that failed, TPG leaked false details about LyricFind.”
The spokesperson confirmed: “Though LyricFind was a lyric supplier for VK, it has not been for years.”
“Though LyricFind was a lyric supplier for VK, it has not been for years.”
LyricFind spokesperson
Following Russia’s invasion of Ukraine in 2022, VK’s CEO, Vladimir Kiriyenko, was sanctioned by a number of governments in areas together with the US, Canada, the UK, and the EU.
As a result of worldwide sanctions, Apple eliminated VK’s apps from the App Retailer globally in September 2022
In the identical yr, in opposition to Russia’s Ukraine invasion, the three main music corporations pulled their operations and releases from the market.
Responding to LyricFind’s suggestion that TPG/MusixMatch leaked confidential info obtained throughout the due diligence course of, a MusixMatch spokesperson mentioned: “This obscure and meritless declare is sadly LyricFind’s newest determined try and distract from their ineptitude.”
“It’s disappointing however not shocking that Lyricfind would declare a ‘breach’ of an NDA in reference to publicly out there info just because they’re embarrassed.”
Musixmatch spokesperson
The Musixmatch spokesperson added: “It’s disappointing however not shocking that they might declare a ‘breach’ of an NDA in reference to publicly out there info just because they’re embarrassed.”
The Warner Chappell unique dispute
The amended criticism alleges that after the “leaked” info didn’t derail LyricFind’s licensing negotiations with Spotify, TPG/Musixmatch executed an “unprecedented” unique settlement with Warner Chappell Music.
This unique pact apparently granted Musixmatch sole rights to each present lyric information providers and sublicense lyric rights for WCM’s complete catalog to digital providers.
LyricFind’s criticism means that the unique deal between Musixmatch and Warner Chappell was signed on or round March 20, 2024.
On the similar time, LyricFind claims it was within the “ultimate levels” of negotiations with Spotify to interchange Musixmatch because the streaming large’s lyrics supplier “at a big low cost”.
On what the submitting calls “the eve of Spotify’s renewal deadline with Musixmatch”, WCM purportedly knowledgeable Spotify of its new unique association with Musixmatch.
The consequence, in response to LyricFind: Spotify renewed with Musixmatch “at considerably greater” charges than these supplied by LyricFind.
Musixmatch has vigorously disputed a number of of LyricFind’s allegations of anti-competitive habits RE: its Warner Chappell deal and the influence on Spotify licensing.
In court docket filings this summer season, Musixmatch known as LyricFind’s lawsuit “meritless” and a “textbook instance of a disenchanted competitor in search of to make use of the courts to attain what it couldn’t within the market.”
In an announcement to MBW earlier this yr, a Musixmatch spokesperson asserted that LyricFind sued as a result of “it didn’t safe rights and win a contract” with Warner Chappell.
“LyricFind is counting on bluster to distract from its enterprise failures,” the Musixmatch spokesperson mentioned. “Rights house owners and digital service suppliers have a selection about whom they do enterprise with and we’re proud that our companions proceed to decide on us.”
Musixmatch has additionally argued that Warner Chappell, as proprietor of the lyrics, “indisputably has the appropriate to completely license and distribute its mental property because it sees match.”
LyricFind’s amended submitting additional alleges that iHeartRadio ended renewal negotiations with LyricFind upon studying it might not service WCM’s lyrics catalog, subsequently signing with Musixmatch “at a value over 5 occasions greater than what LyricFind had beforehand charged”.
LyricFind now estimates its damages within the case exceed USD $1 billion post-trebling.
The corporate additionally claims it paid “tens-of-thousands of {dollars} in exterior authorized charges” investigating the alleged NDA breach, plus substantial worker time diverted from revenue-generating actions.
The case strikes ahead following Decide Jacqueline Scott Corley’s September 3 ruling that allowed most of LyricFind’s antitrust claims to proceed.
Music Enterprise Worldwide
