SoundExchange's lawsuit against Music Choice over unpaid royalties has been referred to the Copyright Royalty Board (CRB) for resolution. The case, initially filed in April 2019, centers on allegations of systematic underpayment of statutory royalties for business establishment services (BES) between 2013 and 2016.

The lawsuit claims Music Choice underreported gross revenues and incorrectly allocated fees for its business establishment service, which provided over 50 channels of CD-quality music to commercial establishments. Under CRB regulations, SoundExchange is entitled to 12.5% of gross revenues from Music Choice's BES operations during this period.

An independent audit conducted by SoundExchange between 2016 and 2018 revealed these alleged discrepancies, leading to the legal action.

U.S. District Judge Reggie B. Walton has stayed the case pending the CRB's decision. The three-judge CRB panel, consisting of Judge David Strickler, Judge Steve Ruwe, and interim Chief Judge Suzanne Barnett, will oversee the case. A status teleconference is scheduled for June 21st, 2022, with parties required to file a joint status report within 30 days of the CRB's decision.

In related news, SoundExchange has also initiated audits of commercial webcasters Audacy and Midwest Communications for their 2018-2020 royalty payment statements. SoundExchange, which collected nearly $950 million in domestic non-interactive digital radio royalties in 2020, continues its efforts to ensure proper royalty payments across the digital music landscape.

Music Choice has not publicly commented on the lawsuit's referral to the CRB.

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