Grooveshark Faces Lawsuit with Another Major Record Label

The battle is on between the music industry and social media as record companies fight for their rights and for their profit margins. EMI Music Publishing has just filed a lawsuit against Escape Media Group, the parent company of the music streaming service Grooveshark.  The New York Times reports that the company is citing breach of contract, claiming that Escape has not “made not a single royalty payment to EMI, nor provided a single accounting statement” since signing the deal in 2009. 

The New York Times article pointed out that while the damages were unspecified, some of the legal documents and emails contained in the filing with the New York State Supreme Court in Manhattan showed that the company is claiming at least $150,000 in unpaid royalties.  It doesn’t sound like a lot, especially considering how much money each side could potentially spend on legal bills, but the added scrutiny on Grooveshark’s business practices could set a precedent for other record labels and service providers to follow in the future.

EMI represents songwriters including Alica Keys, The Flaming Lips, and the late Amy Winehouse.  The company is one of four major record companies to challenge Grooveshark’s use of their music. Last year Universal Music Group sued Escape Media Group for copyright infringement.  Grooveshark had been banking on protection from the Digital Millenium Copyright Act, which excuses service providers from financial liability for copyright violations committed by its users. According to CNET, Universal claimed that Grooveshark’s executives were not protected by the act because they had personally uploaded and posted more than 100,000 pirated songs and that Universal had the internal documents to prove it.  Sony Music Entertainment and Warner Music Group later joined the suit.

This  newest lawsuit between EMI and Grooveshark’s parent company is not a violation of copyrights, but a contract dispute, which does not bode well for Grooveshark if they plan to make similar licensing deals with the other record labels.  But according to  The New York Times, Escape Media Group said in a statement that “this is a contract dispute that we expect to resolve.”