Italy investigates Suno over 'unfair' user terms

Italy's Competition Authority has opened an investigation into Suno's terms of service. The announcement came on 6 October. At stake is the small print agreed to by ordinary users.

The authority, known as the AGCM, listed the case as CV278 AGCM. It said the terms may be unfair under Article 33 of Italy's Consumer Code. That is the national rule against clauses that create a significant imbalance in rights and obligations to the detriment of consumers.

One concern is one-sided control. The AGCM said Suno's terms appear to give the company broad discretion to change the contract, the service and subscription prices without justification Music Business Worldwide. It also flagged clauses that appear to allow suspension, discontinuation or termination of accounts and associated content at any time, for any reason and without prior notice.

Another concern is what users cannot see. The AGCM said users appear to be bound by additional terms they cannot directly access before signing up. It also said the terms appear to limit Suno's liability in broad and generic terms, including for personal injury.

The authority then turned to rights in user material. It said the scope of the licence imposed on users seems insufficiently defined and framed in generic, all-encompassing terms. A licence here means permission to use material, and the AGCM questioned how wide that permission is.

Linked to that is moral rights, the personal rights that let authors claim authorship and object to misuse of their work. The AGCM said Suno's terms impose a waiver of those rights contrary to Articles 20 et seq. of Law 633/1941. That law is Italy's copyright statute.

Disputes are also in focus. The AGCM said the terms appear to require consumers to pursue claims through binding individual arbitration in the United States, a private process outside the courts, with tight deadlines and a waiver of class actions. Class actions allow groups of consumers to bring a claim together. The terms also seemingly give exclusive jurisdiction to the Commonwealth of Massachusetts and its state and federal courts for disputes not subject to arbitration.

What happens next is public. The AGCM said it will open a public consultation on Suno's terms on its website over the next few weeks. Penalties for unfair contract terms range from EUR 5,000 to EUR 10 million. The power to impose those fines dates from 2023.

The case concerns Suno's current terms, which took effect on 3 September after publication on 10 August alongside new monthly download caps for paying subscribers. Those published terms state that users irrevocably waive so-called moral rights or droit moral in connection with content or voice models, that Suno may suspend or terminate accounts for any reason in its sole discretion, and that Massachusetts courts have exclusive jurisdiction over disputes not subject to arbitration.

For users, this means the argument is about fairness, not about any single song. No finding has been made. The investigation will test whether the clauses hold up under Italian consumer law.