Pandora has been stopped from advancing an antitrust lawsuit against comedians, including the estates of Robin Williams and George Carlin, accusing them of monopolizing the market for the rights to the recordings of their routines.
A federal judge on Wednesday dismissed Pandora’s countersuit against the comedians and their licensing group Word Collection, finding the audio giant failed to connect the agency’s “impressive but short list of comedians whose work it licenses” to the company’s inability to assemble the “critical mass needed to offer a viable comedy streaming service, especially when it offers recordings by several thousand other comedians.” While she allowed Pandora another chance to fix its antitrust claims, the judge was skeptical it could sufficiently do so.
“The court doubts whether Pandora can allege the necessary facts at this stage,” writes U.S. District Judge Mark Scarsi.
The high-profile licensing rights battle pits well-known comedians against streaming services. It started in 2021 when Spotify took down albums from several stand up stars, including Tiffany Hadish, Kevin Hart and John Mulaney amid a battle over rights. The estates of Williams and Carlin, joined by Andrew Dice Clay, Bill Engvall and Ron White, subsequently sued Pandora claiming the company and other streaming services don’t properly license their performances. While Pandora pays royalties for the copyrights on their recorded performances, the comedians stress that — unlike songwriters — the company has failed to pay royalties for the copyrights on their underlying written works (i.e., their jokes).
Pandora responded by bringing an antitrust counterclaim against the comedians and Word Collections, which requires exclusive partnerships with authors so that it can set a single price for all assets in its portfolio. In addition to price-fixing, the streaming service alleges these agreements amount to an anticompetitive conspiracy since they’ve allegedly agreed not to license “independently outside of the cartel.” Since Word Collections represents so many different comedians, Pandora says that it’s forced to work with the agency if it wants to offer comedy streaming. It accuses the comedians of bringing the copyright suits as a way to force it to pay overpriced licenses.
To advance an antitrust claim, there must be a sufficient proof to back up claims of a monopoly. While Pandora points to pricey royalties to offer comedy performances, Scarsi found that it “does not allege enough about the reality of the market to demonstrate that Word Collections’ offer of a supracompetitive license exhibited the requisite market power.”
Pandora’s comedy collection includes more than 3,000 comedians and more than 35,000 tracks, according to a 2016 securities filing referenced by the judge.
“Pandora does not allege any control by Word Collections over a critical mass of comedians, any entrenched listener preferences for the comedians represented by Word Collections, or any other restraints that would prevent new comedians or licensors from entering the market to compete with Word Collections,” the order reads.
Pandora also alleged that Word Collections illegally tied together two distinct products — the comedy recordings and the “less desirable material, including not just comedy but other spoken-word material as well.”
Responding to claims that antitrust laws prohibit the tying of the sale of one product to another, Scarsi concluded that “not every refusal to sell two products separately” is a restraint on competition. The order reads, “The counterclaim completely lacks allegations about the volume of commerce in the less-desirable material market affected by Word Collections’ tying.”
“We always believed the antitrust counterclaim Pandora brought was ludicrous and a transparent attempt to intimidate these legendary comedians,” said their attorney Richard Busch. “We are now happy we can focus on and litigate the serious copyright infringement claims that are at the heart of this litigation.”
Oct. 28, 7:26 a.m. PST This story previously showed a photo of Alexander Lacik, CEO of Pandora jewelry brand, and has been corrected.