TikTok TikTok Boom! The ticking time bomb threat of copyright infringement claims for the burgeoning social media platform

Recently the US based National Music Publishers Association (NMPA), a body representing thousands of music publishers and songwriters, threatened to sue social networking platform TikTok for copyright infringement.

For the uninitiated, TikTok is a social networking service owned by Beijing-based company Bytedance, which allows users to create and share short videos featuring dances, lip-sync performances, and comedy, often set to music. The app was launched worldwide in 2018, and quickly became the most downloaded app on the App Store in 2018 and 2019. The platform has been credited with helping break new artists and has been cited as a major factor in making Old Town Road by Lil Nas X one of the biggest songs of 2019. However, rights holders argue that TikTok does not have appropriate licences in place to cover the use of music featured in videos on its platform.

Universal Music, the world’s largest record label and member of NMPA, has been in licence negotiations with TikTok for the past year but the parties have failed to reach an agreement. Universal Music is seeking payment for retrospective royalties in any licensing deal. It had set a deadline of the weekend 4-5 April 2020 for TikTok to respond to its proposal. The outcome is as yet unknown, however, the FT reported on Friday that, according to unnamed sources, Universal “is weighing legal action if TikTok does not respond”. Also according to the FT, NMPA CEO David Israelite believes that legal action by its members is a “likely future step”.

This current situation in the USA was preceded by a similar situation in the UK. ICE (a joint venture representing the digital music rights of collecting societies PRS for Music in the UK, GEMA in Germany, and STIM in Sweden) had been negotiating licence terms with TikTok on behalf of the songwriters, composers and publishers it represents. When the parties failed to reach an agreement on terms, TikTok referred the dispute to the UK’s Copyright Tribunal, asking it to step in to resolve the matter with ICE in July 2019. In December 2019, the parties withdrew the dispute from the tribunal and agreed to enter into an arbitration to agree the terms for TikTok in relation to licensing rights for music represented by ICE. The parties released a joint statement at the time, announcing that the arbitration decision would be applied retrospectively to cover earlier use on the platform. The outcome of this arbitration, if indeed the matter has been resolved, has not yet been made public.

It is clear that the music industry is not happy with TikTok, but the industry can also understand the disruptive power of TikTok and its ability to break new tracks and engage with fans. We await the outcome of the arbitration in the UK and the negotiations in the US with interest, to see if the parties can reach an agreement on terms that fairly reflect the value of rights holders’ music while also allowing the creativity on the social networking platform to flourish.

These on-going disputes highlight the importance of taking specialist legal advice before launching any new social media platform, so as to ensure that copyright issues, alongside all other IP rights, are taken into account, thereby minimising potential legal costs at a future date.