New York, NY (February 2, 2007)–Judge Deborah A. Batts of the U.S. District Court for the Southern District of New York ruled in favor of record companies in their complaint against XM Satellite Radio by denying the defendant’s motion to dismiss the case. Record companies originally filed the complaint in May 2006 over XM’s operation of a digital distribution service that distributes sound recordings without appropriate authorization.
In response, the RIAA issued the following statement from executive vice president and general counsel Steven Marks: “We’re pleased that the court has rejected XM’s attempt to misuse the Audio Home Recording Act (AHRA) as a legal loophole for distributing sound recordings to its subscribers. The AHRA was never intended to allow a service offering distributions of music to duck paying creators what they are due.
“As the court stated, ‘XM is both a broadcaster and a distributor, but is only paying to be a broadcaster.’ XM directly competes with other distribution services like Rhapsody, Napster and iTunes. It only follows that they should obtain distribution licenses just as those services have.
“Parity among digital music services is a key issue in today’s marketplace. With convergence from every direction, it is essential that all services operate on a level playing field where fair competition can thrive.
“We hope this decision paves the way for resolving this case in the marketplace.”
The Consumer Electronics Association (CEA) issued the following statement: “With the motion to dismiss denied, it would be premature for Congress to act on this issue while the judicial process moves forward. Music lovers across the country are adopting innovative digital technologies to enjoy their lawfully acquired content where and when they want; we urge that they won’t be disenfranchised and business models will adapt to better serve today’s digital customers.”
Recording Industry Association of America
Consumer Electronics Association