Competition, intellectual property and Taylor Swift

Taylor Swift has monopolised the hearts and minds of young women for well over a decade, and cemented her status as the preeminent musical icon of our era winning her fourth Best Album Grammy last weekend. But given that competition is just as important in the arts as it is for free markets, how worried should we be about the dominance of Miss Americana?

Taylor Swift’s career is a case study in the tension between intellectual property and the free exchange of ideas. At 15 she signed a contract with Big Machine Records [BMR] handing the company the rights to the masters of her first six albums. Swift and BMR later parted ways and in 2019, BMR was acquired by a holding company owned by a man called Scooter Braun, an associate of Kanye West with whom Swift has had a well-publicised dispute. Swift posted her horrified reaction to Instagram, accusing Braun of ‘incessant, manipulative bullying’ and declaring herself ‘sad and grossed out’. But Braun’s company undisputedly had the rights to the original albums, and anyone who wanted to licence the songs would have to pay him a fee. Swift’s answer was to re-record her old albums to regain ownership of her past work. Today ‘Taylor’s Versions’ are often more popular with fans than the original recordings, and the Swift empire is worth over $1bn. The girl next door won.

There are multiple ways to tell Taylor Swift’s story. An individual against a corporation, or a woman against a powerful man. But her position was that as an artist she had the right to control her work. It is not clear what the effects of her action will be: it may be to tighten re-record clauses. But in an industry with a history of misogyny riddled with nasty examples of artists trapped in long contracts, Swift made a powerful stand.

But the affair also raises the question: at what point an individual’s creation becomes corporate property?

It’s an issue that was tested in a case involving another product primarily consumed by young girls: Bratz dolls. With their big heads, pouty lips and tiny skirts, Yasmin, Chloe, Jade and Sasha came out in the mid-2000s. Parents hated them, teenagers loved them and sales rocketed, presenting the first serious competition to Barbie, who then commanded an estimated 75% market share. Barbie creators Mattel responded by bringing out the suspiciously similar MyScene dolls and MGA, the owners of Bratz sued. So far, this was a conventional battle of intellectual property: at what point does using the same concept of a big-headed, fashionable doll become copying?

But then came the twist. Mattel counter-sued MGA, claiming that they had rights over the Bratz, because their creator, Carter Bryant, had been under exclusive contract with the company when he came up with the design. After much legal wrangling, MGA emerged victorious, but Bratz had been off the shelves and out of the scene for too long and Barbie had defeated Yasmin, Chloe, Jade and Sasha in the battle that mattered, the battle for market dominance.

There are many ways big players can act to prevent competition using intellectual property: lawsuits that place companies in statis until the smaller player runs out of money, killer acquisitions where smaller players are bought purely to be shut down. But a cheap way is to lock in talent, preventing new ideas and new companies starting in the first place: when a company stops protecting its rights over its products, and limiting competition by controlling a person. Today in business, this debate is taking place in the battle over non-compete clauses. In 2020, the UK Government undertook a review of exclusivity and non-compete clauses, proposing to limit the use of non-compete clauses to three months in a bid to boost both innovation and competition. In the States, controversially, the Federal Trade Commission is reviewing the existence of non-compete clauses altogether. There to protect a company’s trade secrets, in practice they can be used to place limitations on employees not just beginning new companies, but simply finding jobs in the same sector. A company does not need to win a case to prevent talent leaving: when one player is much bigger and more powerful than the other, sometimes the threat of legal action is enough.

Intellectual property has evolved like every other codified right. The distinctions in it are nuanced: a debate on appeal in MGA vs Mattel was the distinction between Bryan’s ideas and his designs, the latter of which Mattel undisputedly had a right to. In Taylor Swift’s case, there is a powerful argument to say that a global superstar is legitimately the product of a team. The line between an individual and a product, or an individual and a trade secret, can be incredibly blurred. Intellectual property is a crucial part of competition, as a way to protect small companies against the giants. But the law can be used to limit competition too – and when the line is crossed and competition legislation is used to limit individuals, the law should be amended.

The Barbie-Bratz that might feel irrelevant on paper: doe-eyed plastic against doe-eyed plastic. But when stores requested to only stock the white ‘Chloe’ Bratz doll, MGA CEO Isaac Larian responded that stores could buy all the Bratz dolls or none. And while Barbie, Sindy and Polly Pocket had all been blonde and blue-eyed, when Mattel rolled out MyScene to compete with the Bratz, the dolls were ethnically diverse and consumers had more choice. Freedom to compete matters.

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Frances Lasok is a political professional and writer.

Columns are the author’s own opinion and do not necessarily reflect the views of CapX.