The Majors Just Walked Away From Their $2.6 Billion Copyright Lawsuit Against Verizon
Universal Music Group, Sony Music Entertainment, Warner Music Group, ABKCO Music, and 30 affiliated plaintiff entities filed a joint stipulation of dismissal with prejudice against Verizon Communications on April 22, 2026, in the U.S. District Court for the Southern District of New York, ending a $2.6 billion copyright infringement lawsuit that had been built on a contributory-liability theory the Supreme Court eliminated 28 days earlier in its unanimous Cox Communications v. Sony Music Entertainment ruling.
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The complaint, originally filed in July 2024, alleged that Verizon "knowingly provides its high-speed service to a massive community of online pirates, who it knows repeatedly use that service to infringe," and rested on more than 340,000 infringement notices the labels had sent the carrier since early 2020 across 17,335 allegedly infringed works. The labels had sought statutory damages of up to $150,000 per work, putting the total exposure for Verizon north of $2.6 billion. The dismissal with prejudice, meaning the claims cannot be refiled, follows directly from the Supreme Court's March 25, 2026 ruling in Cox v. Sony, in which Justice Clarence Thomas wrote that Cox "neither induced its users' infringement nor provided a service tailored to infringement," establishing that ISPs cannot be held secondarily liable for piracy on their networks unless plaintiffs can prove either active inducement or a service designed for infringement. The ruling vacated a $1 billion jury verdict that had been the single largest piracy judgment in U.S. history, and the Supreme Court followed it on April 6 with a vacatur of the $46.7 million verdict against Grande Communications, remanding for reconsideration under the new standard. Altice USA and Sony/Warner have requested additional time to evaluate their pending litigation in light of the Cox ruling. X Corp. has cited the Cox decision in its motion to dismiss the music publishers' copyright case against it. The cumulative effect across the four pending ISP cases is the largest reset of music industry anti-piracy enforcement architecture since the 1998 DMCA.
The Independent Music Brief | April 27, 2026
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The four pending lawsuits the major labels had brought against Verizon, Cox, Altice, Grande, and Frontier represent the last decade of the music industry's attempt to force ISPs to police their subscribers' downloading behavior. The legal theory was contributory and vicarious copyright infringement: that ISPs knew their networks were being used for piracy because the labels were sending them tens of thousands of copyright notices, and that ISPs profited from the bandwidth those pirate subscribers consumed. The remedy the labels sought was billions of dollars in statutory damages, and the ask was that ISPs implement and enforce a robust subscriber-termination policy under the DMCA's repeat-infringer requirements. The Cox jury verdict, eventually reduced to $1 billion, established that the legal theory could win at trial, and the labels expanded the strategy across the carrier industry. The Verizon case, with $2.6 billion in claimed damages, was the largest piracy lawsuit in active U.S. litigation when it was filed.
The Supreme Court's unanimous Cox ruling on March 25 closed the legal pathway that all four cases were built on. Justice Thomas's opinion held that providing internet service to subscribers who happen to engage in infringement is not, on its own, contributory infringement. Plaintiffs must prove either that the ISP actively induced the infringement, by promoting its service as a piracy tool, designing features to facilitate infringement, or otherwise affirmatively encouraging unlawful use, or that the service is so tailored to infringement that it has no substantial non-infringing use. Neither standard is met by a general-purpose internet connection that some subscribers happen to use for piracy. The April 22 Verizon dismissal with prejudice is the most direct legal consequence of the Cox ruling so far: the labels evaluated whether they could rebuild the case under the new standard, concluded they could not, and chose to walk away rather than face the discovery costs and adverse rulings that would follow from continuing to litigate.
Why the Cox Ruling Closes the Door So Decisively
Justice Thomas's opinion in Cox v. Sony is short and devastating to the contributory-infringement theory the labels had built their ISP litigation around. The two-prong test the Court adopted, inducement or tailored-service, is the standard the Court applied to peer-to-peer software platforms in MGM Studios v. Grokster (2005), and the Court's Cox application of the standard makes clear that the same analysis applies to ISPs. The labels' theory had been that a sufficiently long history of ignored copyright notices was enough, on its own, to create contributory liability. The Court rejected that theory directly: receipt of infringement notices does not constitute either inducement or tailored service, and the failure to terminate noticed subscribers is not, by itself, contributory infringement.
The ruling does not eliminate ISP liability entirely. An ISP that markets its service as a piracy haven, designs network-level features that facilitate infringement, or builds a product specifically for infringement could still face contributory liability under the Court's framework. But the everyday reality of running a general-purpose ISP, selling internet access to millions of subscribers, some of whom use the connection for piracy, while complying with DMCA notice-and-takedown procedures, is now safely outside the contributory-infringement zone. The legal exposure that drove ISPs to maintain aggressive termination programs has been substantially reduced, and the use the labels had been using to push ISPs toward more rigorous repeat-infringer enforcement has been correspondingly diminished.
The ruling also affects the calculus of every pending ISP piracy case in the country. The April 6 vacatur of the $46.7 million Grande Communications verdict signals that the Court intends to apply the new framework retroactively across the existing piracy litigation portfolio. Altice USA and the Sony/Warner plaintiffs requested additional time on April 14 to evaluate whether to continue litigating their case under the post-Cox framework, and the dismissal pattern the Verizon decision establishes is likely to be followed in the Altice case as well. X Corp. has cited the Cox ruling in its motion to dismiss the music publishers' lawsuit against it, and the precedent is being evaluated by every defendant in any platform or service-provider piracy case currently in litigation.
The contributory-infringement theory was not specific to ISPs, it has been used against P2P software developers, file-locker hosts, search engines, social platforms, and other intermediaries whose services are used by some users to infringe copyright. The Cox ruling tightens the inducement-and-tailored-service test in ways that make it harder for plaintiffs to prevail in any of those categories, not just against ISPs. That has direct downstream effects on the enforcement options available to independent labels and songwriters whose catalogs are being infringed on YouTube, TikTok, file-locker services, BitTorrent indexes, and other platforms where notice-and-takedown is the only practical remedy.
Key Questions for Independent Artists
Will the major labels return to ISP litigation under a different theory, or is the Cox-Verizon dismissal pattern the end of the secondary-liability strategy entirely? The most plausible path forward for the labels is to develop new theories of inducement that satisfy the Cox standard, focused on specific ISP conduct that could be characterized as actively encouraging or facilitating infringement rather than merely failing to prevent it. ISPs that market themselves on privacy grounds, refuse to comply with DMCA notice procedures, or design network features that protect subscribers from copyright enforcement could in theory face inducement claims. .
How quickly will ISPs scale back their repeat-infringer programs in response to the reduced legal exposure? The economic logic of an ISP repeat-infringer program is that the legal cost of failing to maintain one, measured against the operational cost of running the program, has tilted against maintenance for the entire post-DMCA period. The Cox ruling significantly reduces the legal cost side of that equation, which means the argument for running aggressive termination programs has weakened.
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Today's Indie Radar
YouTube extended access to its AI likeness-detection tool to celebrities and the talent agencies that represent them. Music Business Worldwide; TechCrunch; Hollywood Reporter; The Wrap
YouTube's likeness-detection system operates on the same Content ID-style scanning architecture as its existing copyright-detection program: a verified rightsholder enrolls in the program by submitting reference imagery of the protected face, the system scans uploads for AI-generated matches, and the rightsholder is given the option to request removal under YouTube's privacy policy, file a copyright takedown if applicable, or take no action. The expansion to celebrities and talent agencies is structurally significant for independent artists in two ways. First, the enrollment expansion explicitly opens access to creators who do not maintain a YouTube channel, meaning independent musicians whose primary distribution channel is Spotify or Bandcamp can still access the protection without operating a YouTube content presence. Second, the planned voice-detection extension later in 2026 will be the most directly consequential feature for the music industry, because the AI-deepfake threat to recording artists is overwhelmingly voice-based rather than face-based, and a YouTube-scale voice-detection system would substantially reduce the operational cost of identifying and removing AI-generated impersonations of independent artists' vocal performances. Independent artists with established commercial profiles should evaluate enrollment in the existing face-detection program now, and should monitor the voice-detection rollout closely so that they can enroll on day one when the feature ships.
Avex Inc., the Tokyo-listed Japanese entertainment company that owns Avex Trax, Avex Pictures, and the recently expanded Avex Music Group U.S. subsidiary led by S10 founder Brandon Silverstein, established two U.S.-based special-purpose companies on March 30, 2026, and announced its first major catalog acquisition through the new structure on April 24, 2026: Avex Catalog Fund 1 LLC and Avex Song Fund 1 LLC, both Delaware-organized and led by Silverstein, are designed to acquire international music catalogs using non-recourse financing from City National Bank, with a $50 million credit facility and an additional $6 million in equity capital that gives the structure up to $56 million in total deployable capital, supplemented by Avex parent-company financing that brings the available investment pool toward the $100 million mark for catalog acquisitions.
Music Business Worldwide
The non-recourse loan structure caps Avex's exposure at the SPC level, with a 60% loan-to-collateral ratio that limits the leverage the fund can deploy on any individual catalog. Avex Music Group's recent activity has included the March 2026 global publishing administration deal with Bruno Mars, the 2025 acquisition of S10 Music Publishing, the Toibox publishing joint venture with Drake and Rihanna producer Elkan, and a global distribution deal with The Orchard for territories outside Japan, China, and Korea. The structural significance for independent songwriters and producers is that the catalog-acquisition capital pool now includes a Japanese strategic buyer with U.S. operational leadership, non-recourse financing structure, and an explicit mandate to acquire international catalogs, positioning Avex as a credible bidder in the same competitive category as EMPIRE, Concord, Primary Wave, Kobalt, and the Hipgnosis-adjacent funds. Independent songwriters considering catalog sales should add Avex Music Group to their solicitation list, particularly for catalogs with Japan, Asia, or Pacific Rim audience profiles where Avex's parent-company distribution and marketing infrastructure offers operational advantages that the U.S.-only catalog buyers cannot match.