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Federal Register / Vol. 86, No. 27 / Thursday, February 11, 2021 / Rules and Regulations
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issue, it is critical that the MLC
governance be informed at the DMP
level, not just the industry-aggregate level. 115 Regarding the MLCs committees, the MLC envisions that the Unclaimed Royalties Oversight Committee would review DMP-specific data to create policies and procedures to minimize the incidence of unclaimed accrued royalties, such as specific examples of potential matches to get a concrete understanding of what types of results fall into different confidence levels when analyzing matching performance and confidence levels.116
Finally, regarding the DLCs proposed categories of MLC Internal Information and DLC Internal Information, the MLC maintains they are unnecessary because the MLC
and DLC can control disclosures of their internal information through appropriate written confidentiality agreements. 117
Instead, to ensure that the MLC
board and committee members shall not receive inappropriate confidential information, the MLC proposes language to clarify . . . that no copyright owners or songwriters which captures all of the MLCs directors and committee members, except for those representing DMPs will be shown confidential information of other copyright owners, and that digital music providers should not receive information concerning competitors. 118 The MLC maintains that neither DLC appointees, nor publisher or songwriter representatives should be permitted to share confidential information received in their roles as MLC board or committee members with their employers, 119 and that allowing disclosures to 115 Id.; see also id. at 3 stating that it is appropriate and necessary for the MLC to be permitted to share information about specific DMP
interactions with the MLC regarding certifications, efforts obligations, or other reporting or royalty payment obligations, and that such information can be essential context for substantial decisions as to compliance that the board is tasked in the MMA with overseeing, such as whether to audit, notice a default or take other action against a DMP.
116 Id. at 2. The MLC does not anticipate its Dispute Resolution Committee or the Operations Advisory Committee needing to view DMP-specific data. Id. at 3.
117 Id. at 4.
118 MLC NPRM Comment at 19; see id. at 16
Just as music publisher employees who sit on the MLC board or committees should not be permitted to share with their publisher employers confidential information provided to the MLC by competitors of such employer which the Proposed Regulation does not allow, a DLC appointee employed by a DMP should not be permitted to share with their DMP employer confidential information provided to the MLC by a competitor of such DMP employer..
119 Id. at 5.

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employers by any board or committee member, including DLC appointees, would raise significant competitive concerns and jeopardize the MLCs ability to control, and ensure against, unfettered dissemination of confidential or competitively sensitive information. 120 The MLC also contends that MLC board and committee members, regardless of the identity of their employer i.e., whether a DMP, a publisher, a songwriter or a trade organization should be subject to the same, strict provisions concerning the confidential information received in connection with their board or committee engagement. 121 The MLC
contends that the proposed conditions limiting access to information only where necessary to carry out their duties and during the ordinary course of their work is confusing and unnecessary, and suggests that if use of the information is limited to the performance of the MLCs statutory functions, that should be sufficient. 122
The MLC says these phrases also create the argument that MLC
vendors or contractors would have to use an alternate procedure to perform work without using Confidential Information if such was possible, even where it would be highly inefficient and costly. 123
Other comments regarding access of MLC and DLC board and committee members, and DLC member employers, to confidential information generally supported a more limited approach.
CISAC & BIEM assert that while there is certainly a need for the DLC to access certain Confidential Information to perform its duties, disclosure to individual employees of DLC members is not justified. 124 Similarly, ARM
argues that it is not apparent that there is any need for board and committee members to share confidential information with their employers, except . . . to give them access to MLC
120 Id.

at 15; see also id. at 1617 Each DLC
appointee was specifically chosen for his or her knowledge and expertise in the relevant subject matter e.g., individuals chosen to serve on the operations advisory committee have technological and operational expertise, and it would be wholly inappropriate to grant these individuals discretion to share the confidential information of copyright owners and other DMPs with any of more than a million people..
121 Id. at 19.
122 Id. at 12.
123 Id.
124 CISAC & BIEM NPRM Comment at 2; see also id. Any disclosure of Confidential Information should at all times i be justified by a need-toknow basis, and ii be very strictly interpreted in connection to the performance of the relevant duties. Furthermore, iii any individual receiving the Confidential Information should always be obliged to execute a Non-Disclosure Agreement NDA..

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confidential information to obtain feedback concerning operational policies. 125 To ARM, it is not apparent that the MLC board would ever need to discuss confidential information of particular third-party companies, and even in the context of considering whether to authorize an enforcement action by the MLC against a particular DMP, it would seem sufficient for the MLC board to understand that MLC
management believes the DMP
underpaid royalties by a certain aggregate amount. 126 NMPA
recommended that the Offices regulations adopt the same standard for all board and committee members,127
and stated that DLC representatives on the MLC board and committees may have access to a host of sensitive confidential information that, if provided to their employers, could put music publishers and DMPs that are not members of the DLC at a competitive disadvantage. 128 Noting that the MLCs statutorily-created Operations Advisory Committee is made up of various operations technology experts at the DMPs and music publishers who were presumably selected for their roles precisely because they have the relevant subject matter expertise, NMPA further stated that because DLC
representatives work for technology companies, they are far less likely to need to solicit additional subject matter expertise on technical considerations from another individual employed by his or her DMP employer than might a music publisher representative on the MLC board or a committee. 129
In contrast, the Songwriters Guild of America, Inc. SGA and the Society of Composers & Lyricists SCL
proposed a broader approach whereby non-DLC members on the MLC board of directors or committees may receive Confidential Information from the MLC
subject to an appropriate written 125 ARM NPRM Comment at 78; see also ARM
NPRM Comment at 7 The MLC simply should not have information about sound recording royalties to share with board and committee members and the like.; id. If the MLC were to have access to such information, that kind of information should be protected either through an additional category of Highly Confidential Information that would include recorded music company deal terms and other third-party competitively sensitive information and could not be shared with such persons or through an equivalent mechanism such as simply prohibiting disclosure of that type of Confidential Information to such persons..
126 Id. at 7; see id. noting that MLC committee members roles seem directed to setting policy, rather than digging into the details of particular companies activities.
127 NMPA NPRM Comment at 3.
128 Id. at 2 providing music publisher market share data as an example.
129 Id. at 3.

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