Roman GłogulskiThe Mechanical Licensing Collective (MLC) has announced the commencement of audits of Digital Service Providers (DSPs) who have operated under the MLC’s compulsory blanket license in 2021. The audit will cover the period from January 1, 2021, to December 31, 2023, which includes the first three years of MLC’s full operation.
MLC has sent audit notifications to nearly 50 DSPs, including streaming services like Spotify, SoundCloud, Apple Music, and others. Under the Music Modernization Act (MMA), MLC is a non-profit organization responsible for developing and managing the mechanical licensing system. MLC collects and distributes royalties to creators and copyright owners from music services and creates a database of music works information.
The audits aim to verify the accuracy of reports and payments from DSPs, providing crucial safeguards for music authors and publishers. MLC is already implementing various measures to ensure the accuracy of DSP reports, including automated and manual analysis of monthly reports. The organization also employs a utilization registration process.
Importantly, MLC members will not bear the costs of the audits. The expenses will be covered by MLC’s operational budget, funded by DSPs. In the event of an underpayment discovered during the audit, the full amount of compensation will be paid to the rightful recipients without deducting any audit costs.
The MLC audit is crucial in ensuring fair accountability of DSPs and protecting the rights of authors. It represents a significant step in fulfilling the obligations of MLC as defined by the MMA. Conducting audits will allow for precise monitoring of music usage by digital service providers and fair compensation for creators and publishers.
