Why is Roblox being sued for $200 Million?

Roblox is being sued by the National Music Publisher's Association (NMPA) over claims that the online gaming company allows the illegal use of songs while exploiting young people's lack of understanding about copyright laws. The NMPA is seeking $200 million in damages.

NMPA president/CEO David Israelite declared the lawsuit during the trade group's annual meeting on Wednesday, June 9, 2021. Artists specifically named in the lawsuit include Ed Sheeran, Ariana Grande, and Imagine Dragons, among others, as reported by Variety.

Beyond the illegal use of songs, Israelite claims that the Roblox company takes advantage of its young developers and their misunderstanding of copyright, as the company earns "hundreds of millions of dollars by requiring users to pay every time they upload music onto the platform," said Israelite. He also claims that the Roblox company fails to alert its users or prevent repeat occurrences.

Roblox responded in a statement on Thursday, June 10, 2021, stating their surprise and disappointment, arguing that the lawsuit misunderstands how the platform operates. The company emphasized their use of advanced filtering technology "to detect and prohibit unauthorized recordings" and that the company is determined to "defend Roblox vigorously as [they] work to achieve a fair resolution."

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Music has been a longtime feature across the Roblox platform. Players have the ability to purchase in-game Gamepasses with prices set by developers to use the Radio feature, which allows users to enter music ID codes to listen to their favorite artists like Billie Eilish and Juice WRLD. There are also paid cosmetic Avatar items like the Golden Super Fly Boombox that allow users to play music in-game , although boomboxes have been phased out more and more from the platform and most Roblox experiences do not enable the music feature in 2021.

This lawsuit appears to have affected the Roblox stock price, which has decreased by around 2% as of this time of writing. The Roblox company went public on the stock market through direct listing in March 2021 and has achieved multiple record-high stock prices, peaking at an all-time high of $103.8661 USD.

Since March, the company has continued hosting events like Metaverse Champions and the In the Heights Block Party, while forming partnerships with Hasbro for Nerf Blasters, a Monopoly board game, and more.

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