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GM, Ford Sued by Music-Industry Group Over 'CD-Ripping' Vehicles

By Mark Wilson, Esq. on August 01, 2014 | Last updated on March 21, 2019

A device installed in many GM and Ford vehicles has driven a music-industry group to seek a court's intervention.

The Alliance of Artists and Recording Companies, an organization that collects fees levied on the sale of home recording devices, has filed a class action complaint accusing Ford and General Motors of placing certain types of hard drives in its cars without paying the requisite fees. The drives in question are "capable of making a digital audio copied recording for private use," the lawsuit asserts.

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Fees for a CD Recorder?

Yes, Virginia, it's true. The Audio Home Recording Act of 1992 is essentially a tax on devices whose purpose is to create digital copies of audio media.

In the late 1980s early 1990s, the technology existed to allow consumers to make digital copies of audio recordings that, unlike analog cassette tapes, were nearly perfect, could last indefinitely, and could be re-copied with the same fidelity as the original.

After industry trade organizations like the RIAA threatened to sue manufacturers of these devices out of existence, they all reached a compromise in which the government could require manufacturers of digital audio recorders and blank digital media to pay a fee that would be distributed to music publishers and songwriters. The rationale was that they needed to be compensated for sales lost due to home recording.

What's Going On Here?

The lawsuit asserts that both GM and Ford make cars containing a CD player that allows the driver to "rip" the contents of the CD onto a hard drive inside the car. While this technology isn't new (is it 1994 already?), AARC claims that the hard drives inside the cars fall into the AHRA and therefore, Ford and GM have to cough up a fee.

However, as Torrent Freak points out, "the law is not as black and white as AARC's complaint states." The AHRC contains an exemption for devices that make copies just for personal home use. It also doesn't include computers.

In 1999, the Ninth Circuit Court of Appeals concluded that the Rio MP3 player, which could store copies of songs ripped from CDs, didn't fall within the AHRA's scope, as "computers (and their hard drives) are not digital audio recording devices because their 'primary purpose' is not to make digital audio copied recordings."

AARC's footing here is probably better than in the Rio case. The "computer," software, and hard drive allegedly in the Ford and GM cars seems to be designed for one purpose: to rip tracks from CDs.

As for the class action status, that might not be forthcoming. AARC represents 300,000 artists, and while they all have the potential to be harmed by a lack of royalties should the device fall within the AHRA's scope, it's uncertain how much each one of them has been harmed, absent an exhaustive accounting of whose tracks are being copied, and how much. (That's going to be difficult, to say the least.)

This is only the beginning of a battle that's probably going to end up at the Supreme Court, as each side will claim that a win for the other would signal either the death knell of music or the death knell of technology.

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