Why did Google launch its cloud service without licences?

I’ve been sitting on a story from BusinessWeek from two months ago when the magazine reported that Google offered the major record labels $100 million to obtain licenses for its new cloud music service, but that one of the reasons that talks broke down was that the labels wanted Google to be more proactive in the fight against digital piracy. Google then launched a cloud locker service – without licences - and the legality of that has yet to be tested in the US courts. It is also interesting that Google filed a Amici curiae brief back in January in support of the defendant in the main case looking at this issue, EMI v MP3Tunes. MP3tunes operates a digital cloud “locker” service and is being sued by the major labels.

CNET asks why the labels would pass up big dollars for antipiracy considerations. Whether the story is true or not, it is clear that the large entertainment companies are trying to pressure Google to make changes – and the news of the new scheme brokered in the USA with the major ISPs means to me that this story makes more sense now. As the top Internet search engine, Google is believed to be in a position to make it more to difficult to find pirated materials online, for example the company's ads are often found on sites accused of trafficking in pirated or counterfeited materials. To be fair, Google has already agreed to a series of changes, and those include booting alleged copyright violators off AdSense, and blocking terms associated with piracy from appearing in the search engine's Autocomplete function, but maybe the record labels and other content providers recent success with ISPs in the USA mean that they are now prepared to take a tougher line when it comes to Google’s current stance.

Read more: http://news.cnet.com/8301-31001_3-20066799-261.html#ixzz1NdejMtcs and see US content industry and ISPs agree to be alert in Music Law Updates, August 2011 www.musiclawupdates.com and see http://the1709blog.blogspot.com/2011/01/cloud-is-future-google-joins-eff-in.html

Capitol Records, LLC. et al v MP3Tunes, LLC., and Michael Robertson
No. 07 Civ 9931 United States District Court Southern District of New York

Money for old tracks: a reader asks

One of our readers has written to ask the 1709 Bloggies if they have any advice or experience that they can bring to bear on this little problem.

A British-based advertising agency has been approached by the American Federation of Musicians (AFM) in relation to its use of US music tracks. It seems that the AFM is asking for backdated payments on behalf of background artists who contributed to those music tracks, for example as backing singers ot musicians.

This agency has assumed that the normal procedure adopted by agencies in the UK when they want to use music tracks is (1) contact the music publisher and (2) contact the recording company to seek permission to use the sound recording. When it uses British music, it generally contacts the Musicians Union, which confirms how much to pay with regard to background artists. However, where US music is concerned, this agency has not been contacting the AFM, because it didn't know it had to -- a belief that was reinforced by assurances from some of the recording companies. The UK agency has also heard that the reason why advertising agencies in the US contact the AFM to arrange for payment in relation to use of background artists is because they have already made an agreement with the AFM to do so.

The UK agency therefore asks as follows:
(1) if it isn't a signatory to the agreement that was signed between the AFM and US agenices, does it still need to pay?
(2) does the answer to (1) change if the practice for some time has been that it never had to pay? and
(3) if it does have to pay, will it have to pay the backdated sums? and
(4) likewise, if it has to pay, what proof if any does the AFM need to bring in order to establish how much it should pay (right now, it seems, the AFM is asking for what appears to be an arbitrary sum, based on little proof of how many background artists were actually involved in a track).

The UK agency adds that it has heard that advertising agencies in Canada are facing the same payment requests from the AFM.

Can any readers offer any practical or legal guidance here?