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The decision upheld an earlier ruling that Yahoo does not have to pay additional fees to record labels, based on the non-interactivity of their channels.
COURT RULING FOR YAHOO COULD SPUR ONLINE RADIO GROWTH
Company Does Not Have to Pay Extra Royalties To Labels Based on Non-Interactivity
In a case that could help boost Internet radio, the Second U.S. Court of Appeals in New York has now ruled against Sony Music Entertainment in Arista Records vs. Launch Media, a case that revolved around the interactive aspects of Yahoo Music's Launchcast radio service. 

The decision upheld an earlier ruling that Yahoo does not have to pay additional fees to record labels, based on the non-interactivity of their channels.

Yahoo still has to pay statutory rates on recordings; the current challenge centered around whether its customization required additional payments.  The court ruled that individual playlists remained random enough that they did not impact download purchases.  The case involved the service between 1999 and 2001; since that point, a number of modifications have happened.

The outcome confirms an earlier ruling against all four majors, though Sony was the only party that challenged the previous decision.  Industry attorney Ray Beckerman told Digital Music News that the newer decision offers a "a safe harbor for a whole industry and business model."

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