Music Industry Coalition Warns EU Proposal Could Cost U.S. Artists $300 Million in Royalties

A broad coalition of major U.S. music industry organizations has called on the U.S. Trade Representative to oppose a new European Commission proposal that threatens nearly $300 million in annual royalties for American creators. The proposal seeks to replace the long-standing 'national treatment' standard with a 'material reciprocity' model, which would allow EU member states to limit payments based on how the U.S. treats foreign artists. This shift could significantly impact the global copyright system and create financial instability for recording artists, musicians, and labels operating in international markets.

The coalition, which includes organizations such as the Recording Academy, SAG-AFTRA, ASCAP, and BMI, sent a joint letter to the U.S. Administration expressing concern over the European Commission’s plan to reverse a 2020 ruling by the Court of Justice of the European Union. That ruling currently ensures U.S. recording artists and labels receive royalty protections across the EU. By moving to a system of material reciprocity, the EU would condition these protections on U.S. law, potentially ending payments from the 21 of 27 EU member states that currently compensate American creators under national treatment rules.

Industry leaders argue that national treatment has long been a cornerstone of the global copyright system, ensuring American creators are treated no less favorably than domestic rightsholders abroad. The coalition warned that the proposed change would replace a clear, rules-based international system with one that is fragmented and uncertain, directly disadvantaging U.S. creators in foreign markets. Furthermore, there is a fear that this proposal could set a precedent, encouraging other nations to adopt similar restrictive policies and weakening long-standing global copyright protections.

To resolve the underlying tension, the groups pointed toward the American Music Fairness Act as a viable domestic solution. This bipartisan legislation would require U.S. AM/FM radio stations to pay performers for broadcasts, bringing the U.S. in line with international standards already followed by streaming services and satellite radio. Supporters believe passing this bill would address the European Commission's primary grievances regarding how foreign creators are treated in the U.S. while securing fair compensation for American artists both at home and abroad, thereby preserving the $300 million in annual revenue currently at risk.

The diverse group of signatories includes the American Association of Independent Music (A2IM), the American Federation of Musicians, Artist Rights Alliance, and SoundExchange, among others like the Music Managers Forum-US and the National Independent Talent Organization. These groups collectively emphasize that maintaining the current royalty structure is vital for the financial health of the American music sector. They urge the U.S. Trade Representative to take a firm stand against the EU's proposal to prevent the loss of significant annual revenue for performers and rights holders.