A federal judge has thrown out a lawsuit filed by Musi, a Canada-headquartered streaming service, against Apple, ruling that the latter did not breach its contract when it pulled the music streaming app from the App Store in September 2024.
In October 2024, Musi sued Apple, accusing it of breach of contract and breach of good faith and fair dealing in its decision to remove the Musi app from its store. Musi was removed over alleged “intellectual property infringement.”
The removal follows an article published by Torrentfreak in July 2024, which said that global recording industry group IFPI reported Musi to the App Store, and in 2023 it contacted Musi’s lawyers over a feature called “secret sauce,” which evidently gave Musi users access to pre-release music.
That feature was discontinued after communications with IFPI, Torrentfreak reported.
Apple then stated that the National Music Publishers’ Association (NMPA) and Sony Music Entertainment had complained about the app’s practices, in addition to a previously reported complaint from the IFPI.
In response, Musi accused Apple of taking part in a “backchannel scheme with music-industry conglomerates” to remove the app from the App Store.
As MBW reported at the time, Musi, whose app was only ever available through Apple’s App store, doesn’t license music from rightsholders and hasn’t built a library of licensed music. Instead, it gives users access to audio of YouTube videos through its own interface. The app reportedly served its own ads on the interface.
On Monday (March 16), Judge Eumi K. Lee of the US District Court for the Northern District of California granted Apple’s motion to dismiss with prejudice, according to the latest court document, which you can read here.
“Musi claims that Apple breached the Developer Program License Agreement (DPLA), which governs the relationship between Apple and software developers, and that Apple breached the implied covenant of good faith and fair dealing. Apple moves to dismiss, primarily arguing that it had an express contractual right to remove the Musi app from its App Store,” Judge Lee wrote.
“The Court reviewed the briefs and relevant law and heard argument on the motion. For the following reasons, Apple’s motion to dismiss is GRANTED, and Musi’s complaint is DISMISSED with prejudice.”
“The implied covenant of good faith did not require Apple to side with Musi in this dispute. Nor did the implied covenant require Apple to continue to oversee an informal dispute process in which Musi ‘responded’ to complaints by denying them,”
Judge Eumi K. Lee, US District Court for the Northern District of California
The judge said according to Apple’s DPLA, the company “reserves the right to cease marketing, offering, and allowing download by end-users of the Licensed Applications at any time, with or without cause, by providing notice of termination to [the developer].”
The court rejected Musi’s argument that a clause in Apple’s DPLA required the tech giant to conduct a review and reach a reasonable conclusion before removing an app. Judge Lee said the “reasonable belief” provision states that it does not “limit the generality” of Apple’s termination right.
On Musi’s good faith and fair dealing claim, Judge Lee said: “The covenant of good faith and fair dealing cannot impose an obligation on Apple that contradicts this express term,” noting that a claim for beach of the implied covenant was “precluded by the specific terms” of the DPLA.
Musi also failed to plausibly allege that Apple acted in bad faith, according to Judge Lee. The judge said Musi’s complaint reflects that “Apple was facing pressure from multiple music industry complaints.”
Sony Music Entertainment had written to Apple accusing Musi of sourcing its content without authorization, bypassing YouTube’s technical protections, and paying nothing to creators or rights holders. Sony had also warned it was “considering other enforcement options.”
“In sum, Apple was not required to expose itself to legal claims by Sony or other rightsholders for Musi’s benefit. This claim is dismissed.”
Judge Eumi K. Lee, US District Court for the Northern District of California
“The implied covenant of good faith did not require Apple to side with Musi in this dispute. Nor did the implied covenant require Apple to continue to oversee an informal dispute process in which Musi ‘responded’ to complaints by denying them,” wrote Judge Lee.
“In sum, Apple was not required to expose itself to legal claims by Sony or other rightsholders for Musi’s benefit. This claim is dismissed.”
Judge Lee also partially granted Apple’s motion for Rule 11 sanctions against Musi’s counsel, Winston & Strawn LLP, ordering the firm to pay Apple’s attorneys’ fees tied to the sanctions litigation, according to a separate court document (read here).
Music Business Worldwide
