In today's CMU Daily: Apple is facing a mega-fine. Nearly five years after Spotify first submitted a formal complaint to the European Union over Apple’s App Store rules, EU regulators are reportedly about to fine the tech giant €500 million having concluded that those rules breach competition law

One Liners: Primary Wave’s Village People deal; Jimmy Iovine sexual assault lawsuit dropped; Paul McCartney reunited with stolen bass after 50 years; Kylie Minogue to headline BST Hyde Park show; McFly 21st anniversary show; new music from Kokoko! and Joker

Also today: The Hipgnosis v Hipgnosis saga continues with a new lawsuit, Sony Music sues Whitney biopic producer over unpaid sync fees, and FEAT welcomes the EU Digital Service Act going into effect this weekend

Plus: On this week's Setlist podcast, when arts funding and politics collide, plus MLC v Pandora

Apple faces €500 million fine after Spotify-prompted EU competition investigation

The European Union is reportedly getting ready to fine Apple in the region of half a billion euros for breaching competition laws by forcing unfair trading conditions on music streaming services. The mega-fine is the outcome of an EU investigation that began with a complaint from Spotify.

According to the FT, multiple sources with direct knowledge of the EU's investigation have confirmed the plan to impose a fine "in the region of €500 million". The regulators have reportedly concluded that Apple's App Store rules regarding the highlighting of payment options outside the Apple ecosystem are prejudicial against streaming services that compete with the tech giant's own Apple Music.

"Brussels will accuse Apple of abusing its powerful position and imposing anti-competitive trading practices on rivals", the FT reports, adding that "the EU will say the tech giant’s terms were unfair trading conditions”.

Spotify - and many other app developers - have long criticised Apple's App Store rules in relation to in-app payments. Those rules state that, with certain apps, all in-app payments must be taken using Apple's own commission-charging transactions platform. Not only that, but app developers cannot sign-post users to other payment options outside of their apps - a rule often referred to as the anti-steering provision.

Apple's commission on in-app payments is up to 30%. As Spotify's profit margin is also in the region of 30%, it would need to pass on the Apple charge to the customer, which makes a Spotify subscription look more expensive than an Apple Music subscription.

The other option, which is the one Spotify took, is not to take in-app payments at all. But that makes up-selling premium subscriptions to free tier users much harder, and the introduction of pay-to-access tools within the Spotify app - to monetise podcasts and audiobooks - basically impossible.

Spotify filed a formal complaint with the European Commission over Apple's rules in 2019. EU competition regulators initially sent a statement of objections to Apple in 2021 raising their own concerns that Apple's in-app payment rules were anti-competitive. Two years later an updated statement of objection was sent announcing that the investigation had been narrowed to specifically focus on the anti-steering provision.

It's that which the regulators have seemingly deemed is anti-competitive, prompting the proposed mega-fine, one of the most significant fines ever levied against a tech company by the EU, and the first to target Apple.

Apple has already been forced to make some changes to its App Store rules as a result of litigation, regulator intervention and changes in the law. That includes the EU's new Digital Markets Act. Although Spotify was scathing about the changes Apple is making in order to comply with the new EU regulations, which it dubbed "a complete and total farce".

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Live Music Booker // The Halls (Wolverhampton)

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Horizon is CMU's new weekly newsletter - published each Friday - that brings you a hand-picked selection of early-stage career opportunities from across the music industry.

Whether you're looking for your first job in music or you're ready to take a step up, Horizon is here to help you find your dream job faster.

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ONE LINERS

Paul McCartney, Kylie Minogue, McFly + more

DEALS

Primary Wave has agreed a partnership with the estate of original Village People producer Henri Belolo, giving the company a stake in the group’s brand, recording and song rights. “As we were picking up the mantle following our father’s passing in 2019, we soon realised that - to achieve his dreams of bringing the Village People ideal into the 21st century - the right way is a very bold endeavour”, say Belolo’s sons Jonathan and Anthony. “Our partnership with the amazing team at Primary Wave now brings us the back up and expertise that will ensure we can rise to the task together. With multiple projects in development, the future looks bright as ever for the Village People!”

LEGAL

An unnamed woman who filed a lawsuit last November accusing Jimmy Iovine of sexual abuse and harassment has dropped her claims, according to a new court filing made in New York last week. The legal claim against the Interscope co-founder and former Universal Music and Apple Music exec was filed under New York's Adult Survivors Act.

ARTIST NEWS

Paul McCartney has been reunited with a Höfner bass guitar stolen from him around 50 years ago following an international search launched last year by the company’s Nick Wass. Find out more about its rediscovery here.

GIGS & FESTIVALS

Kylie Minogue has been announced as the latest headliner for this year’s BST Hyde Park. She will play the series of open air shows in London on 13 Jul. Tickets are due to go on sale on Wednesday.

McFly have announced that they will play a special show at the O2 Arena in London on 10 Oct to mark their 21st anniversary as a band. “It’s crazy to think that it has been 21 years since McFly was formed and we all moved into a house together”, says drummer Harry Judd. “We don’t take it for granted that after all this time people still want to hear new music from us and come to see us play live. As a band we’re always looking forward to what's next, but this show will be a fun opportunity to reflect on our career so far”. Tickets go on general sale on Friday.

RELEASES

Kokoko! have announced that they will release their new album ‘BITU’ on 5 Jul. Out now is first singler ‘Mokiki’. They’ve also announced a London show at Village Underground on 1 Oct. Tickets are on sale now.

Joker is back with her first solo music for six years. He has released two new tracks, ‘Juggernaut’ and ‘S Wave’.

Hipgnosis v Hipgnosis battle intensifies with new lawsuit

The Hipgnosis v Hipgnosis battle continues, with the Hipgnosis Songs Fund - or SONG - informing its investors that it is taking legal action against its investment advisor, Hipgnosis Song Management. The lawsuit is part of a bid by SONG to indemnify itself in relation to an entirely different Hipgnosis v Hipgnosis legal battle.

The London Stock Exchange-listed SONG told investors last year that it had been named as a defendant in a lawsuit filed by the liquidators of a defunct Hipgnosis company called Hipgnosis Music Limited.

That lawsuit targets both SONG and HSM, as well the founder of all the Hipgnosis businesses, Merck Mercuriadis. The liquidators of Hipgnosis Music Limited have alleged that, prior to the winding up of the company, there was a “diversion of business opportunity” to SONG and HSM, ie an opportunity that should have been pursued by Hipgnosis Music Limited was taken up by the other Hipgnosis entities.

In terms of SONG specifically, the lawsuit alleges that the fund “unlawfully assisted Mr Mercuriadis with, or received, this alleged diversion”.

At the time of that investor update it was confirmed that SONG, HSM and Mercuriadis “deny such claims and intend to vigorously defend them”. Earlier this month the current board of SONG - which was appointed last year and has repeatedly criticised HSM - confirmed it was seeking to secure an indemnity from HSM in relation to the lawsuit, basically ensuring the fund and its investors won't lose out financially as a result of the litigation.

In a statement this morning, the board said: "The investment adviser, which was founded by Mr Mercuriadis and where Mr Mercuriadis is a director, has refused to indemnify the company against liabilities which may arise from Mr Mercuriadis' alleged misconduct".

"The company is concerned, having been assured by Mr Mercuriadis and the investment adviser that these claims are without merit and that they intend to vigorously defend them, that the request for an indemnity was refused", they continued, adding, "The company is not insured as to the costs of this claim".

With that in mind, they stated, "the company now intends to bring a Part 20 Claim in the High Court against the investment adviser in which it will seek a full indemnity".

Setlist Podcast: When arts funding and politics collide

In this week's Setlist Podcast: Chris Cooke and Andy Malt discuss questions and potential legal action over the politicisation of arts funding, as Kneecap are denied money by the British government and Arts Council England issues new guidance for anyone thinking of being controversial, plus the legal battle over royalties currently brewing between MLC and Pandora, and more.

🎧 Click here to listen - or search for 'Setlist' wherever you normally listen

Anti-touting campaign hails EU Digital Services Act going into effect as "a landmark moment" for the live sector

The European Union's Digital Services Act went fully into force this weekend, constituting "a landmark moment for Europe’s live events sector", according to FEAT, the pan-European campaign against for-profit ticket touting. That's because new rules in the DSA will apply to online ticket resale platforms like StubHub and Viagogo.

"The new regulation, designed to create a safer digital environment, includes key provisions lobbied for over two years by FEAT on behalf of Europe’s live entertainment sector", the campaign group said on Friday.

After being passed in October 2022, the DSA began applying last year to nineteen specifically identified 'very large online platforms'. As of Saturday the regulations now apply to all online intermediaries operating in the EU.

“This is a landmark moment for Europe’s live events sector", said FEAT director Sam Shemtob. "Our priority now is to ensure that the new rules are enforced, with a clear process for removing illegal ticket listings as and when they appear. FEAT is looking forward to working with Digital Services Coordinators across the member states to make this happen and lay the groundwork for a fairer, more transparent ticket-buying experience for consumers on the secondary market".

The EU itself has pledged to work hard to ensure compliance with the new regulations and urged member states to do likewise. Commissioner For Internal Market Thierry Breton said, "We are fully mobilised to ensure full implementation of the DSA and we encourage all member states to make the most out of our new rulebook. Effective enforcement is key to protect our citizens from illegal content and to uphold their rights".

According to FEAT, new rules of relevance to the secondary ticketing market include an obligation on platforms to identify and verify professional sellers. "Online marketplaces will be required to obtain essential information about third party professional sellers, such as name, contact details and ID, before traders can list tickets on the platform", it explains. "They will also be required to ensure that the seller’s name, contact and trading details appear on the listing".

Platforms will also be "banned from using design tricks that manipulate consumers into decisions", will have to "make it clear throughout the buying process that the tickets listed are provided by a third party", and will need to "produce easily comprehensible and publicly-available annual reports on takedowns of ticket listings".

Sony Music sues over unpaid sync fees from Whitney Houston biopic

Sony Music has sued the makers of the 2022 Whitney Houston biopic 'I Wanna Dance With Somebody' over allegations they have failed to pay fees due under a deal that was negotiated covering the synchronisation of the musician's recordings into the film.

With those fees unpaid, the use of the Sony-controlled tracks in the film is now unauthorised, says a lawsuit filed in California last week. Therefore, the film-makers have “no legal right to use the Sony Music recordings", and their "conduct has caused and continues to cause substantial and irreparable harm to [Sony Music] and the estate of Whitney Houston, while enriching [themselves] at the expense of [the label] and the estate of Whitney Houston".

The litigation targets Anthem Films and various other companies involved in the production of the biopic, although not the film's distributors which, in most markets, were subsidiaries of Sony Pictures.

Kicking things off by slightly stating the obvious, the lawsuit explains that "musical biopics are biographical films that dramatise the lives of some of the greatest musicians. Unlike other types of films, musical biopics by their nature require use of the subject musician’s music, as it is nearly impossible to explain the importance of a musician’s creative genius or unique style and talent without the use of the musician’s music".

As for the sync deal done between Sony and Anthem, it says, "aware of the need for authorisation to use plaintiffs’ sound recordings in order to produce a biopic about the life and music of Whitney Houston, and aware of the value of [the label’s] catalogue, Anthem entered into a licence agreement and access agreement with Sony Music, each dated as of 5 Dec 2022".

All the fees due under those contracts should have been paid by July 2023, but, the lawsuit states, "Anthem has failed to pay the fees owed to Sony Music under the agreements", despite the fact the film’s "worldwide theatrical grosses having totalled over $59 million". Not to mention additional income from "home video sales and from a licence of the film to Netflix".

With all that in mind, the major wants the courts to hold Anthem et al liable for copyright infringement and order them to pay the music company lots of damages.