The U.S. House of Representatives unanimously approved the Music Modernization Act Wednesday in an effort to update copyright laws for the digital age, according to Bloomberg.
The proposed law charges Spotify Technology SA SPOT, Pandora Media Inc P, Amazon.com, Inc. AMZN, Apple Inc. AAPL and Alphabet Inc Class A GOOGL with building a joint song database and supporting three judges who would set songwriter royalties.
It also establishes rules for sound engineer payments and delays the expiration of copyrights for artists who recorded before 1972.
Why It’s Important
The changes could increase royalty expenses for music streaming companies, but it could also limit damages charged in related lawsuits, Bloomberg said. Whether the law will affect the value of royalties in current lawsuits is yet to be seen.
Spotify was down about 1 percent after the open Thursday, while Pandora was down 0.55 percent. Amazon was trading up 1.76 percent, while Apple was up 0.75 percent and Alphabet was rising 0.25 percent.
What’s Next
The Senate will consider the proposed law in May and debate whether to separate the three issues into distinct bills.
By the time of publication, neither Pandora nor Spotify had responded to requests for comment from Benzinga.
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