What Google v. Oracle means for the music industry

In October 2020, the Supreme Court heard the opening oral arguments for Google vs. Oracle, a decades-long debate that some are suggesting is the music copyright case of the decade.

That might initially sound strange to you. After all, as its name suggests, Google v. Oracle is not explicitly about music at all; rather, it’s rooted in a power struggle for software ownership between two tech conglomerates.

That said, this case could potentially impact the relevant and sensitive topic of artist compensation on emerging tech platforms. In particular — while I’m generally weary of grand expectations for lawsuit verdicts — this case is in a position to expand the US fair-use doctrine, in a way that gives technology companies unprecedented leeway to reproduce exact copies of copyrighted content on their platforms without paying artists. This not only has the potential to excise artist compensation from future tech business models, but would strike at the heart of whether artists can create sustainable careers in our digitized music industry.

Let’s back up a bit. The origin of Google v. Oracle lies in the tense competition between Apple’s iPhone iOS and Google’s Android mobile phone operating system, which launched in 2007 and 2008, respectively. While Steve Jobs outright denounced the use of Java in the iPhone iOS, Google was courting Sun Microsystems — the creators of the Java computer language — for a license to adapt Sun’s Java Standard Edition (SE) desktop platform for Android.

In 2005, licensing negotiations between Google and Sun fell through — but that didn’t discourage Google from using Java anyway. Its Android developers recognized that Java was the most popular computer language at the time, so implementing Java would allow more third-party developers to design apps for their nascent operating system. As a result, Android developers embedded an exact copy of the Java SE API into the Android OS — an action that Google does not deny, but in fact opts to defend, “perhaps making enemies along the way.”

In 2009, Oracle acquired Sun for around $7.4 billion. One year later, in August 2010, Oracle sued Google for Android’s alleged infringement of the Java SE platform API. As the lawsuit passed through a labyrinth of motions and appeals, the focus of the litigation has landed on the extent of Oracle’s copyright in the Java SE software, and whether Google has a fair-use defense for its use of the API. This case eventually led to the Federal Circuit ruling in favor of Oracle in 2018, but the Supreme Court still granted Google’s petition for review late last year.

The ways in which the Supreme Court’s decision could affect the competitive landscape for software copyrights and development deserves its own article. For the sake of this discussion, we’ll focus on the case’s implications concerning the future of fair use in the music-tech ecosystem.

Google’s arguments: A wholesale approach to fair use

To understand how the future of music and technology could evolve from a Google verdict, we need to dive a bit into Google’s specific arguments for fair use.

The concept of fair use is based on the principle that in order to promote creativity and the freedom of expression, creators — in limited circumstances — should be allowed to borrow a portion of one another’s work without a license. US copyright law expressly identifies a number of fields that benefit from fair use, such as journalism, criticism, teaching and research. However, over the years, US fair use as a doctrine has turned into an amorphous creature of the judiciary.

In summary, a person asserting a fair-use defense is required to satisfy a four-part balancing test:

• The purpose of the use (e.g. commercial vs. nonprofit), and whether the use is “transformative” (i.e. whether it adds “something new, with a further purpose or different character, and do[es] not substitute for the original use of the work,” in the words of the US Copyright Office)
• The nature of the work being copied (e.g. information vs. entertainment)
• The amount or proportion of the original work being used in the new work
• The effect (positive or negative) of the new work on the market for the original copyrighted work, which can include both sales and licenses

In the case of Google v. Oracle, the controversy in Google’s arguments come down to the first and fourth factors, which tend to be the most heavily weighted factors in any fair-use debate.

Google is arguing that its use of the Java SE API is noncommercial because Android is available for free under an open-source license. In 2016, the United States District Court for the Northern District of California also suggested that Google could bolster this argument by asserting that its intention for using the unlicensed API was to promote “the general interest in sharing software innovation,” rather than purely to make money. As for the transformative consideration, Google argues that since Sun/Oracle never used the Java API specifically for mobile phones, Google’s adaptation was an instance of transforming the API into a different context.

Regarding the market for the copyrighted work, Google’s argument is that Oracle never licensed, used or adapted its Java API in the mobile phone industry, so its use of the API didn’t hurt any actual or potential commercial markets for Oracle. Google argues that judges and juries should focus on how an unlicensed use affects the markets that a copyright owner actually licenses in, not those that they may be inclined to license in later as a market matures.

Implications for music-tech: The erosion of licensing opportunities

In the aggregate, Google’s arguments extend fair use so that the notion of copyright ownership appears to be a burden for ad-based technologies. Consider Google’s Android OS business model: Google gets to reap billions in profits from direct advertising on Android OS, so long as they can keep Oracle — the rightful copyright owner of an integral piece of code — out of its wallet. Google designed its Android profitability strategy with the knowledge that it would one day make enemies with Sun/Oracle for lifting its intellectual property. Google’s strategy only saw copyright infringement as a cost of revenue.

Google’s logic benefits “innovation” by allowing ad-based digital services to host a copyright owner’s content on its platform under the guise of fair use if the owner has not licensed their works to that category of digital service. Technology designers of ad-based services that subtly add on to or transpose technology in an unprecedented way could integrate and rely on copyrighted works for free. Copyright creators would remain tied to the income streams of legacy online services, missing the opportunity to grow with technology.

In a recent op-ed for Billboard, Will Page, the former Chief Economist at both Spotify and the UK’s PRS for Music, shared his belief that the music streaming subscription market has “peaked.” If this is true, then I find that the only ways to ensure that artists in our digitized music economy can continue to survive are if we 1) increase the number of entities that are licensing music from rights holders, and 2) increase streaming subscription prices and licensing fees.

Recent commentary suggests that the E.U.’s passage of Article 17 could increase the number of entities licensing music by removing the expectation of tech entrepreneurs that you can use unlicensed music to drive product growth. Article 17 essentially encourages tech companies to license music before launching their products because, if not, they will become directly liable for the unlicensed content published on their services.

This is a stark contrast to the reactive, whack-a-mole-esque, notice-and-takedown regime built into the US’s Digital Millennium Copyright Act (DMCA), which, together with the Communications Act, legally insulates online services from unlicensed content published on their platform and only requires said content to be taken down if flagged.

Article 17 can potentially serve as a beacon of survival for artists, in that the up-front licensing of music by emerging businesses and online tech platforms will create new sources of revenue that together can support a living wage for artists. This will allow artists — and their incomes — to grow alongside these services, instead of playing courtroom catch-up through a series of lawsuits.

Yet, if the Supreme Court adopts Google’s wholesale fair-use logic, then it is likely that future ad-supported music services will defend their hosting of unlicensed content with an ambiguous “software innovation” battle cry, instead of pursuing proper compensation for artists and rights holders.

Fair use and the DMCA contradiction: The case of “Lovebird”

Consider the implications of a hypothetical, US-based, ad-supported karaoke dating app making millions of dollars in revenue every year, with the help of unlicensed, “fair-use” music on its platform to drive engagement. Let’s call this hypothetical app Lovebird.

Despite its likely poor reception in the market, an app like Lovebird could arguably satisfy the criteria for fair use in the US Its use of unlicensed music could qualify as noncommercial because the service is ad-supported, and one could argue (using Google’s logic) that connecting single people online via love-song duets could fulfill some ill-defined standard of societally advantageous “software innovation.” This, too, would also arguably be transformative and not impact a potential market for song owners because no one, to my knowledge, is licensing their music in this unprecedented context of karaoke dating software.

Scaled across multiple ad-based tech businesses, such an argument about music content and fair use could have far-reaching effects for artists. Already, paltry royalty rates for streaming provide few incentives for artists to create music. Tack on even less robust copyright protections, and the vanishing income that results could cause our declining creative class to disappear entirely, indie record labels and publishers to buckle under operating costs and the culture created by independent music to fall into decay.

In contrast, US-based tech firms would do just fine in a world where music is free. Insulated from Article 17 and served by an expanded fair-use regime, these companies could drive their growth and ad revenue on top of “free” music until they expand internationally. Such a broad, uncertain fair-use standard would also throw into question whether US-based tech companies even need to comply with DMCA takedown requests in the first place. This would allow mainstay social media platforms, like Facebook and Twitter, to sell advertising on a larger pool of potentially unlicensed or infringing content uploaded to their platform.

In conclusion: Even though Google v. Oracle seems on the surface like a big-tech case unrelated to music, one of its potential outcomes — a world in which artists would be expected to live as fair-use martyrs for the benefit of new tech — not only would be a blow to artist licensing opportunities, but also could ultimately collapse the public’s opinion on the value of music altogether.

Similar to how Napster ignited the public’s taste for piracy in the early 2000s, the knowledge that new tech companies don’t have to pay artists in the US for their art could potentially degrade the value of music in the public eye. While the number of paid music subscriptions are anticipated to reach 450 million globally by the end of this year, the public’s devaluation of music could also call for a decrease in subscription prices. “Why would you pay $9.99 for a Spotify Premium account when my karaoke dating app gets it for free?”

Earlier this year, several music-industry representatives, including the Songwriters Guild of America, filed a 47-page amicus brief with the Supreme Court, voicing their support of Oracle and arguing that “independent artists and songwriters rely on copyright protection and clear fair use standards to defend themselves in the market.” The rest of the music business would also do well to follow this case closely in the coming months, for the sake of avoiding the repetition of history and better aligning tech innovation with creative careers and artists’ livelihoods.