Lyrics Monopoly? Judge Refuses To Dismiss Antitrust Lawsuit Over Musixmatch’s Warner Deal

A federal judge says Musixmatch must continue to face an antitrust lawsuit over allegations that the company is trying to monopolize the market for providing lyrics to streamers like Spotify.

In a ruling issued Wednesday, Judge Jacqueline Scott Corley refused to dismiss a case filed earlier this year by rival LyricFind, which claims that Musixmatch inked an “unprecedented” exclusive deal with Warner Music Group, shutting out competing companies from that label’s huge catalog.

If later proven with evidence — a big “if” in any lawsuit” — the judge said that LyricFind’s allegations would amount to a violation of federal antitrust laws.

“LyricFind plausibly alleges Musixmatch entered an exclusive agreement causing injury of the type antitrust laws are intended to prevent and substantially foreclosing competition,” Judge Corley wrote.

Musixmatch had argued that it did nothing wrong by signing the deal with Warner Chappell Music (which is not named as defendant in the lawsuit nor accused of wrongdoing). But the judge cited an earlier ruling against a company that had used exclusive contracts to shut out competition.

“That is essentially what LyricFind alleges here: that Musixmatch entered an exclusive deal with WCM — never asking LyricFind for a competing bid — which precludes LyricFind from offering services for WCM-controlled compositions, which account for approximately 30% of streams and around 60% of the top 100 songs,” Judge Corley wrote.

Wednesday’s ruling is not a final decision, but is a clear win for LyricFind. The ruling avoids an early-stage dismissal and allows the lawsuit to proceed into discovery, where both sides exchange evidence, and toward an eventual trial. A spokesman for Musixmatch and TPG did not immediately return a request for comment.

The decision came in a courtroom showdown between two leading lyrics service providers – companies paid by Spotify, Apple, YouTube and other streaming services to secure licenses, transcribe songs, and administer royalty payments for lyrics displayed on the platforms.

At the center of the case, filed in March, is a licensing agreement that MusixMatch and its private equity owner TPG Global recently struck with Warner Chappell, which LyricFind says has “eliminated competition and raised prices.”

The major music companies have historically licensed their vast catalogs of lyrics on a non-exclusive basis, the lawsuit claims, allowing firms to compete for the right to provide them to streamers. But LyricFind says the new deal with Warner was instead an exclusive deal that shuts out competitors from a third of the market — an arrangement that it called “unprecedented.”

“Musixmatch’s goal was simple: make sure that Spotify, and other [streamers], have no choice but to obtain [lyrics] from Musixmatch despite its higher fees — a plainly anticompetitive result,” the company’s attorneys wrote at the time. (Neither Warner Music nor Spotify were named as a defendant in the case or accused of any wrongdoing.)

Musixmatch hit back in June, asking the judge to dismiss the case. The company said it had done nothing wrong, and that LyricFind had turned to the courts simply because it was “angered” that a particular customer had cut ties in favor of a competitor.

“LyricFind, unable to convince WCM to do business with it instead, has filed this meritless antitrust suit … hoping it can obtain through litigation what it was unable to win in the marketplace,” the company’s lawyers write. “Stripped of buzzwords and hyperbole, the core of LyricFind’s complaint is simply that WCM chose Musixmatch instead of LyricFind.”

But in Wednesday’s ruling, Judge Corley said LyricFind had a stronger case than Musixmatch had claimed. At one point, she cited the alleged leverage that such a deal would give a company in negotiations with a streamer like Spotify.

“LyricFind plausibly alleges that even if it offered superior services and prices, DSPs would still contract with Musixmatch because they need access to WCM songs and are unwilling to bear the cost and inconvenience of contracting with Musixmatch for WCM songs and with LyricFind for the rest,” the judge wrote.

The ruling did dismiss several counts from LyricFind’s lawsuit, including those leveling conspiracy allegations. But the dismissal was not permanent; the judge gave the company a chance to update its lawsuit and refile those claims in the future.

In a statement to Billboard on Thursday, LyricFind’s lawyer Kellie Lerner said she and her client were “pleased” with a ruling that “offers a strong rebuke” to Musixmatch’s claims that the lawsuit was meritless: “We look forward to continuing to amass evidence of Musixmatch and TPG’s anticompetitive scheme.”