Hollywood's top music label is fighting back against TikTok.
Late Tuesday, Universal Music Group (UMG) said it will pull the songs of its artists, which include Taylor Swift, Drake, Justin Bieber, and Adele, among others, after the two entities failed to negotiate a new licensing contract, which expired on Wednesday.
In a fiery open letter to artists, UMG said TikTok, owned by China's ByteDance, "attempted to bully us into accepting a deal worth less than the previous deal, far less than fair market value and not reflective of their exponential growth."
The label said it's been pressing the social media company on three critical issues — appropriate compensation for artists and songwriters, protections from artificial intelligence, and online safety for TikTok users.
UMG said TikTok proposed a compensation rate "that is a fraction of the rate that similarly situated major social platforms pay." The label added that TikTok accounts for only about 1% of the company's total revenue, "an indication of how little TikTok compensates artists and songwriters."
"Ultimately TikTok is trying to build a music-based business, without paying fair value for the music," the company said.
In regards to artificial intelligence, UMG accused TikTok of allowing a flood of AI-generated recordings on the platform and encouraging the creation of AI music through the development of new tools.
The label argued this content "massively dilute[s] the royalty pool for human artists, in a move that is nothing short of sponsoring artist replacement by AI."
Artificial Intelligence has quickly turned into a complicated headache for the music industry.
On the one hand, artists and companies like Universal are trying to figure out how to utilize the technology known as generative AI to produce content. On the other, companies must navigate how to protect the work and earnings of artists with whom they have relationships.
Ultimately, UMG said TikTok has responded to its demands "with indifference, and then with intimidation," and although it recognizes the challenges this move will cause, it has an "overriding responsibility to our artists to fight for a new agreement."
In response, TikTok said it is "sad and disappointing that Universal Music Group has put their own greed above the interests of their artists and songwriters."
"TikTok has been able to reach 'artist-first' agreements with every other label and publisher," the statement. read, alluding to a "wide-ranging" deal it struck with Warner Music Group back in July. "Clearly, Universal's self-serving actions are not in the best interests of artists, songwriters and fans."
Currently, TikTok users can only play up to a 60-second clip of a song. Universal plans to remove all of its licensed songs from TikTok in the coming days.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on Twitter @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
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