The Webcaster Alliance has filed a suit against the Recording Industry Association of America and five major record labels for anti-competive behavior. The case arises from a deal last year, details of which were first reported by The Register, between a handful of small webcasters and the RIAA to set performance royalty rates.
The WA alleges that the plan was part of a strategy to wipe out an entire industry at birth - the independent webcasters - and the suit has explosive political implications for senior Congressman Sensenbrenner who forced the deal. Sensenbrenner later admitted taking $18,000 from the RIAA for a trip to the Far East.
"A private negotiation between the RIAA and the VOW" - the breakaway group responsible for cutting the deal - "became, by virtue of the SWSA [Small Webcaster Settlement Act of 2002], an industry deal for all small webcasters."
The suit alleges that the VOW agreement "actually put many small webcasters in a worse position" than they had been under the rates set by the Library of Congress' Copyright Office earlier that year, by for example mandating a fourfold increase in in the minimum royalty fee.
The Webcaster Alliance alleges that this and an earlier agreement with Yahoo! "had the intent and effect of restraining competition in the market for domestically recorded sound recordings and in the market for the Internet distribution for such sound recordings."
Complete article@The Register
