Georgia Supreme Court ruling puts internet radio stations on same playing field as AM/FM stations

By Chandra Lye | Apr 10, 2017

ATLANTA (Legal Newsline) – The Supreme Court of Georgia has ruled that internet radio services are similar enough to AM/FM services to allow an exemption to the state's Criminal Reproduction and Sale of Recorded Material statute.

According to the March 20 decision written by Justice Harold Melton, all justices concurred that internet radio services provided by iHeartMedia are exempt from the law (OCGA).

A question was submitted to the court by the U.S. District Court for the Middle District of Georgia with regards to whether internet radio services offered by iHeartMedia were permitted to be exempt under OCGA. It stems from a complaint filed on Sept. 29, 2015, by Arthur and Barbara Sheridan.

The couple own several pre-1972 master sound recordings of some popular music and claim that iHeartMedia did not pay them for the permission and that the company does not have a license to play their music.

In their complaint, they alleged the internet station violated the OCGA § 16-8-60, which comes with criminal penalties.

“The Sheridans claim that iHeartMedia needed their consent to transfer their master sound recordings to iHeartMedia listeners, and that iHeartMedia engaged in racketeering activity by making unauthorized transfers,” court documents stated.

In response, iHeartMedia claimed an exemption to the law, claiming it does not apply when sharing for radio or television broadcast transmission or similar uses.

The Supreme Court stated that iHeartMedia services are similar to those of a radio station and that both broadcasts are “qualitatively” the same.

“The only difference for the listener is that the music would be accessed through an internet-connected device such as a smartphone or computer, rather than a traditional radio receiver.”

It also acknowledged that iHeartMedia had a custom service that allowed listeners to create their own listening experience. However, it stated that too was similar to radio stations as some stations broadcast a certain genre of music or cater to a specific audience.

“From the perspective of a listener, a shift from an AM/FM radio to an internet radio service would mean only minor changes to the user’s experience.”  

The court also noted the song was used in a temporary way whether online or through the airwaves.

“In either format, the listener may enjoy the recording, but the transmission of the recording is not stored for replaying.”

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