SiriusXM is requesting a federal judge to dismiss a class action lawsuit asserting that the company reaps billions by imposing a misleading “royalty fee” on its subscribers, contending that there’s “nothing deceptive” about its pricing structure.
The class action, initiated in federal court last year, claims that SiriusXM adds a substantial “U.S. Music Royalty Fee” on top of the advertised price — a fabricated charge with a misleading title intended to falsely lead consumers to believe it’s a government mandate to cover music rights.
However, in a response on Monday, the attorneys for the satellite broadcaster assert that the company “clearly and consistently” communicates all fees that consumers will encounter before they subscribe, including the base price and “taxes and fees.”
Trending on Billboard
“There is nothing deceptive about Sirius XM’s actions,” state the company’s attorneys. “Every detail that the plaintiffs claim Sirius XM tried to ‘hide’ has been openly available. Plaintiffs were informed of the total they needed to pay for their music plans, and they received what they paid for—as described in every communication between Sirius XM and its customers.”
The lawsuit, which was launched in June by four dissatisfied SiriusXM customers looking to represent millions of other users, asserts that the Royalty Fee constitutes 21.4% of the initial price – yielding the company an impressive $1.36 billion in 2023 alone. The plaintiffs contend that while the fee itself is not illegal, it should be transparently advertised and clarified for potential purchasers.
“This lawsuit contests a misleading pricing strategy where SiriusXM incorrectly promotes its music plans at lower rates than what it actually charges,” wrote the plaintiffs’ attorneys at that time. “SiriusXM purposefully omits the fee from its subscriber disclosures. The company even avoids using the term ‘U.S. Music Royalty Fee’ in any of its marketing, including the fine print.”
The lawsuit argued that the name of this fee is designed to sound significant and legitimate, but it’s merely a “camouflaged double charge for the music plan itself” that no other competing music services impose as an additional cost above the stated price.
“Rational consumers would assume that the quoted price for SiriusXM’s music plans would encompass the essential costs of securing the rights required to deliver the music content promised in those plans,” the subscribers’ lawyers stated in their complaint.
Nevertheless, in their response on Monday, Sirius claimed that there was nothing misleading about the fee’s name, which they argue “offsets royalties owed to copyright holders of sound recordings and musical compositions.”
“Sirius XM has fulfilled its promise: to charge a monthly fee for music subscriptions, plus ‘fees and taxes,’ resulting in a clearly and repeatedly disclosed total price that combines both,” the company stated. “And the fee charged by Sirius XM is precisely what its name indicates: one to cover royalty costs.”
The plaintiffs’ attorneys are expected to submit a reply in the coming weeks, after which a judge will make a decision regarding SiriusXM’s motion in the following months. Should the motion be denied, the case will move forward toward a trial.
- Source: NEWHD MEDIA
