Major Labels Win $46M Piracy Verdict Against Internet Service Provider

A federal jury in Texas decided Thursday (Nov. 3) that an internet service provider must pay the three major record labels and others more than $46 million in damages over music illegally downloaded by the company’s subscribers.

After a month-long trial, jurors found that Grande Communications was legally liable for copyright infringement committed by its users — and that it owed separate damages for each of the more than 1,400 songs that were pirated on the company’s network.

The case is one of several such cases filed by music companies against ISPs, aimed at forcing them to take more proactive steps to eliminate piracy on their networks. In 2019, the labels won a shocking $1 billion verdict against Cox Communications in a similar case.

Grande’s attorneys did not immediately respond to a request for comment Friday on the verdict. Mitch Glazier, the head of the Recording Industry Association of America, called it “the latest validation by US courts and juries that unchecked online infringement will not stand.”

“The jury’s strong action here sends an important message to Internet Service Providers,” Glazier said. “Artists, songwriters, rightsholders, fans and legitimate services all depend upon a healthy digital music ecosystem that effectively protects creative works online.”

Universal Music Group, Warner Music Group and Sony Music Entertainment teamed up to sue Grande in 2017, claiming the company had put itself on the hook by failing to take action against users who repeatedly pirated music.

“Defendants have been notified that their internet customers have engaged in more than one million infringements,” attorneys for the labels wrote at the time, but “have permitted repeat infringers to use the Grande service to continue to infringe plaintiffs’ copyrights without consequence.”

Internet service providers are typically not liable for individual infringements by their millions of users, thanks to the Digital Millennium Copyright Act’s “safe harbor.” But starting in the mid-2010s, music companies began arguing that ISPs had forfeited that immunity by ignoring the DMCA’s requirement that they terminate “repeat infringers” from their network.

Starting with a landmark case filed by BMG Rights Management against Cox, those arguments have repeatedly proved successful. Major labels have filed similar cases against Cox, Charter, RCN and other ISPs in courts around the country, winning huge verdicts like the $1 billion award against Cox (which is currently pending on appeal).

Facing such a lawsuit, Grande fired back that the music industry was wrongfully trying to turn ISPs into “copyright police.” Grande said such claims should really be targeted at the actual people who steal music, but that record labels had stopped pursuing them “due to bad publicity.” That was a reference to a series of controversial lawsuits filed in the 2000s, including one that ordered a Boston college student to pay $675,000 for pirating just 30 songs.

But the federal judge overseeing the case denied Grande’s motions and sent the case to trial, which kicked off last month. Following Thursday’s verdict, the company can appeal the ruling — first by asking the judge to overturn it, and then by taking the case to a federal appeals court.

Read the verdict form here: