European Union AI Rules Criticized, Anti-Piracy Bill Advances and TRAIN Act Returns
How The Music Business Works - Issue #22
July 31, 2025
Welcome back to How The Music Business Works!
This week’s headlines span fierce debates over AI regulation, renewed efforts to curb global piracy, and shifting trends in the recorded music market.
As Europe’s creative sector pushes back on the EU’s AI policies, U.S. lawmakers are doubling down on transparency and enforcement. Meanwhile, Germany’s music growth slows, and Spotify takes a financial hit despite solid performance numbers.
Here’s a closer look.
Creative Industries Slam EU AI Act Implementation as ‘Betrayal’
A coalition of major European creative and copyright organizations has criticized the European Commission’s implementation of the EU AI Act, claiming it favors AI developers at the expense of creators and rightsholders. The group accuses the Commission of ignoring the concerns of the cultural sector during the drafting of official guidance documents tied to the Act’s copyright and transparency rules. At the heart of the dispute is Article 53 of the AI Act, which requires AI companies to be transparent about the copyrighted materials used to train generative AI models and to comply with European copyright law.
Bipartisan ‘Block BEARD Act’ Moves Forward—Bill Targets Large-Scale Foreign Piracy Operations
A bipartisan group of U.S. senators has introduced the Block BEARD Act of 2025, a bill designed to give copyright holders a legal pathway to block foreign websites that engage in large-scale piracy. The legislation is led by Senators Thom Tillis, Chris Coons, Marsha Blackburn, and Adam Schiff, and has been widely praised by the music, film, and broader creative industries. The Act would allow rightsholders to petition U.S. federal courts to order internet service providers to block access to foreign piracy sites, provided they can show evidence of specific harm and the criminal nature of the operation.
TRAIN Act Reintroduced As AI Giants Face Continued Congressional Scrutiny
A bipartisan group of U.S. senators has reintroduced the TRAIN Act (Transparency and Responsibility for Artificial Intelligence Networks Act), a bill designed to require AI developers to disclose what copyrighted material is used in training their models. The TRAIN Act proposes an administrative subpoena process that would allow rightsholders to request information from AI developers about the copyrighted content used in training their generative models. The latest version expands the definition of who qualifies as a “developer” to include any person, company, or government agency that creates, modifies, or owns generative AI systems even if built on existing models.
Germany’s Recorded Music Sales Grew 1.4% in the First Half of 2025, Marking a Significant Slowdown
Germany’s recorded music market grew by 1.4% YOY in the first half of 2025, reaching €1.157 billion, according to the German Music Industry Association. While still positive, the growth marks a significant slowdown from the 7.6% increase recorded in H1 2024. Given that inflation in Germany has hovered around 2% in recent months, this year’s modest increase actually suggests a slight decline in real terms. The breakdown reveals diverging trends within the market. Digital music revenue rose 3.9% YOY, helping support overall growth. However, that was partially offset by a sharp 13.2% decline in physical sales, with CD sales alone falling 20.1%. These shifts reflect broader economic stagnation in Germany in recent years.
Spotify Sees $16 Billion Wiped Off Market Cap; Stock Sinks 11.5%
Spotify’s stock plunged 11.5% on July 29, erasing over $16 billion from its market capitalization after the company reported strong Q2 user growth but issued a profit forecast that fell short of expectations. Despite adding 8 million premium subscribers to reach 276 million and boosting monthly active users to 696 million, Spotify’s Q3 guidance for operating income came in well below analyst estimates of around €560 million. The profit miss was largely due to unexpected “Social Charges”, payroll taxes in certain countries tied to the company’s soaring share price and the value of employee stock compensation. In Q2 alone, these charges totaled €116 million, nearly double what Spotify had forecast and up sharply from €58 million a year earlier.