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The Canadian Federal Court of Appeals has ruled that digital music services do not have to pay performance royalties on 30-second preview clips.
This follows a 2007 ruling by the Copyright Board of Canada that said such previews fell under 'fair dealing' as they counted as consumer “research” to help them decide what music to buy online.
The Canadian court decided that the preview clips used by digital music services qualify as 'fair dealing' under the Canadian Copyright Act (similar to fair use elsewhere). The appeal had been made by the Society of Composers, Authors and Music Publishers of Canada (SOCAN). Canada isn't the only country where this issue has been controversial: also in the US, publishers and performing rights bodies have been complaining about the lack of royalties from such preview clips.
Source: Billboard - http://tinyurl.com/3yz5aob