The Mechanical Licensing Collective (MLC) Faces an Audit by Bridgeport Music — This Could Get Ugly

Mechanical Licensing Collective under audit
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Mechanical Licensing Collective under audit
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Photo Credit: MLC

The Mechanical Licensing Collective (MLC) established after the passage of the Music Modernization Act (MMA) is facing its first audit.

The Music Modernization Act modified the compulsory mechanical license for reproducing and distributing songs from a song-by-song licensing system to a blanket licensing regime, administered by the MLC.  Starting in January of 2021, streaming platforms (DSPs) like Spotify switched obtaining the new blanket mechanical license to make digital songs available in the form of streaming, downloads, or interactive streaming.

But nearly three years later, are people getting the right payments? Part of the MMA legislation provides audit rights, such as the MLC’s ability to audit DSPs to verify the accuracy of royalty payments. Musical work copyright owners may also opt to audit the MLC to verify accuracy of royalty payments, which is exactly what Bridgeport Music has initiated.

On November 9, 2023 the Federal Register office received the correct notice of intent to conduct an audit of the MLC from Bridgeport Music. The period in question begins January 1, 2021 through December 31, 2023—meaning Bridgeport wants to audit the last two years of royalty administration under the MLC.

Bridgeport is a notoriously litigious rightsholder. The company was so aggressive that it was fined in 2008 over its allegations that the rap song “99 Problems” illegally sampled the Bridgeport-owned song “Get Off Your Ass and Jam,” performed by George Clinton and the Funkadelics.

“Given the litigation history of Bridgeport in this and companion cases, it was not an abuse of discretion for the district court to award fees and costs against the company in the hopes of motivating it to litigate in a more responsible, realistic manner, and to deter it from continuing to engage in questionable litigation tactics,” Judge McKeague wrote at the time of that judgement.

That certainly wasn’t an isolated incident. Bridgeport went after UMG Recordings in 2009 for Public Announcement’s “D.O.G. In Me” and its phrase “Bow wow wow, yippie yo, yippie yea.” A jury found that the defendants had willfully infringed on Bridgeport’s rights and awarded statutory damages of $88,980 in that case, with the ruling upheld in November 2009 in a Court of Appeals.

Could Bridgeport be squaring up to use the MLC audit as ammo in future litigation?