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Federal Register / Vol. 86, No. 27 / Thursday, February 11, 2021 / Rules and Regulations MLC or DLC, as opposed to information provided to the MLC and DLC more generally e.g., supply contracts. The definition is also adjusted to generally refer to information as opposed to documents and information to clarify that a document containing both confidential and non-confidential information should be extended protection, though the rule retains provisions identifying specific documents that the Offices regulations require to be disclosed e.g., notices of license to clarify that they are not subject to the interim rules restrictions on disclosure and use. As proposed by the MLC, confidential information does not include any top-level compilation data presented in anonymized format that does not allow identification of such data as belonging to any particular digital music provider, significant nonblanket licensee, or copyright owner. At the DLCs suggestion, the rule creates categories of MLC Internal Information and DLC
Internal Information, to separately address the use and disclosure of sensitive financial or business information about the MLCs and DLCs internal operations as opposed to confidential information disclosed to the MLC and DLC by third parties.
The interim rule creates various restrictions on the disclosure and use of confidential information by the MLC
and DLC, as well as their employees, agents, consultants, vendors, and independent contractors, and members of their boards of directors and committees. In response to concerns about competitive harm that could result from the improper disclosure of confidential information from DMPs and copyright owners, the interim rule states that the MLC and DLC must limit disclosure of confidential information to their employees, agents, consultants, vendors, and independent contractors who are engaged in the entities respective authorized functions and who require access to confidential information for the purpose of performing their duties during the ordinary course of their work. The MLC
and DLC are prohibited from disclosing confidential information to members of their boards of directors and committees, and from using confidential information for any purpose other than their authorized functions under section 115. Consistent with the proposed rule, the MLC and DLC may disclose confidential information to qualified auditors or outside counsel under the statutorily-permitted audits, and to the Office, Copyright Royalty Board, and federal courts, or when such disclosure
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is required by court order or subpoena, subject to an appropriate protective order. Notwithstanding any restrictions, the rule states that the MLC may fulfill its disclosure obligations under section 115 e.g., delivering royalty statements to copyright owners or communicating with the DLC. In keeping with the Offices preexisting rule governing comparable royalty statement reporting requirements under the song-by-song section 115 license, the interim rule does not place any confidentiality restrictions on copyright owners once they receive royalty statements from the MLC. The rule clarifies, however, that royalty statements to copyright owners should not include confidential information that does not relate to the recipient copyright owner or relevant songwriter in addition to the minimum information required by the Offices regulations.
Because MLC Internal Information and DLC Internal Information do not relate to sensitive business information disclosed by DMPs, significant nonblanket licensees, or copyright owners, the rule does not impose strict disclosure requirements as it does with confidential information. Instead, it creates categories of individuals to whom the MLC and DLC may disclose MLC Internal Information and/or DLC Internal Information subject to a confidentiality agreement, giving the MLC and DLC some flexibility if they decide additional disclosure is necessary. For example, the interim rule states that the MLC may disclose MLC
Internal Information to members of the MLCs board of directors and committees, including representatives of the DLC who serve on the board or committees. Should the MLC decide to disclose MLC Internal Information to a contractor, the rule does not prohibit the MLC from doing so; it states that the MLC may disclose MLC Internal Information to other individuals in its discretion, subject to the adoption of reasonable confidentiality policies. The rule contains a parallel provision for the DLC and DLC Internal Information. It also permits representatives of the DLC
who serve on the MLCs board of directors or committees and who receive MLC Internal Information to share such information subject to a confidentiality agreement with employees, agents, consultants, vendors, and independent contractors of the DLC who require access to MLC Internal Information for the purpose of performing their duties.32
32 In a parallel rulemaking regarding notices of license, notices of nonblanket activity, and reports of usage and payment, the Office expressed an intention to adjust those regulations to directly
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These issues are discussed in turn below.
A. Defining Confidential Information 1. Confidential Information as Defined Under the Proposed Rule The MMA does not define the term confidential. 33 The proposed rule defined confidential information as including sensitive financial or business information, including information relating to financial or business terms that could be used for commercial advantage and trade secrets, and enumerated categories of information and documents expressly intended by the statute to be covered by the Offices regulations governing the treatment of confidential and other sensitive information,34 including with respect tothe confidentiality and security of usage, financial, and other sensitive data used to compute market shares, 35 financial and other sensitive data shared by the MLC to the DLC
about significant nonblanket licensees,36 and voluntary licenses.37
The proposed rule also defined confidential information as including sensitive personal information, including but not limited to, an individuals Social Security number, taxpayer identification number, financial account numbers, or date of birth other than year. 38
As these are potentially broad categories, the proposed rule also refined the definition of confidential information by excluding information that is not confidential. Borrowing from current regulations governing SoundExchange in connection with the section 114 license, and as recommended by the DLC, the proposed reference the Offices confidentiality regulations once they had taken effect. 85 FR 58114, 58140
n.365 Sept. 17, 2020. The Office has now determined that such adjustment is not necessary.
33 See 17 U.S.C. 115d12C, e.
34 85 FR at 22562.
35 17 U.S.C. 115d3JiIIbb; see H.R. Rep.
No. 115651, at 27 Unclaimed royalties are to be distributed based upon market share data that is confidentially provided to the collective by copyright owners.; S. Rep. No. 115339, at 24
same; Conf. Rep. at 20 same. CISAC & BIEM
contend that creators percentage share should not be made publicly accessible in the database. CISAC
& BIEM NPRM Comment at 2. The statute, however, contemplates such information being made publicly available in the database. 17 U.S.C. 115d3Eii iii.
36 17 U.S.C. 115d6Bii.
37 Id. at 115d11Ciii. Music Artists Coalition MAC contends that data relating to market share determinations and voluntary licenses should be publicly shared. MAC Reply NOI
Comment at 23. The statute, however, specifically contemplates such information being treated as confidential information. Id. at 115d3JiIIbb, d11Ciii.
38 85 FR at 22562.

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