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Chuck D sues UMG

THE ENEMY STRIKES BLACK: Public Enemy’s Chuck D filed a class-action lawsuit against UMG in U.S. District Court in Northern California on Tuesday, alleging that Universal owes its artists "hundreds of millions of dollars in royalties" for digital downloads and ringtones, TheWrap reports. According to the suit, UMG artists and producers are entitled to 50% of the net receipts from digital downloads and ringtones, but the company has treated such transactions as sales of physical product. Meaning that not only is there a much lower royalty rate involved, but the company makes deductions for things like containers and packaging—which aren't an issue for digital downloads or ringtones. The difference, the suit claims, is massive. According to Chuck D's claim, under UMG's current method of accounting, artists and producers receive $80.33 for every 1,000 downloads, when the correct amount should be $315.85 per 1,000. On the ringtone side of things, the discrepancy is even more drastic. The suit claims that UMG's current accounting method yields $49.89 per thousand downloads, as opposed to the $660 per 1,000 that the suit claims is actually owed. The PE frontman is demanding a jury trial. The suit follows a similar action initiated by the trust of Rick James alleging that UMG is treating licensing profits as resale profits. Though the company attempted have the complaint dismissed, U.S. District Judge Susan Illston dismissed that motion Tuesday. (11/3a)

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