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The lawsuit was filed in San Francisco federal court and alleges that UMG routinely miscalculates the royalties owed to artists for digital downloads, such as MP3s and ringtones, by treating them as "sales" of physical records rather than "licenses."
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Chuck D's lawyers announced at Hausfeld LLP saying that UMG has underpaid hundreds of millions of dollars in royalties and pointed to a decision in 2010 by the Ninth Circuit Court of Appeals that offers some precedent that digital downloads should be treated as "licenses."
"This complaint suffers from serious flaws and weaknesses, not the least of which is that the claims asserted are not appropriate for class treatment," a UMG spokesperson tells THR. "We will vigorously defend against it."
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