BDM Network Anti-Fraud Policy

Table of Contents

1. Introduction
2. Definitions
3. Policy
4. What Digital Music Services (DMS) are Doing About It
5. Our Actions Against Fraud
6. Handling Suspected Fraud
7. Consequences of Fraudulent Use of Our Platform or Services
8. Severity, Strike Policy, and Account Blocking
   • Severity Levels
   • Strike Policy
   • Blocked Account Policy
   • Withholding Royalties (“Escrow”) for Blocked Accounts
9. Takedowns

Introduction

In this Policy, the term “End User” refers to any person or legal entity that has entered into a contractual relationship with us by accepting our Terms of Use and providing content for distribution on Digital Streaming Platforms (DSPs). “We” or “Us” refers to BDM NETWORK, the service provider.

The purpose of this Anti-Fraud Policy is to outline our approach to fraud prevention for the users of our platform and services. It is designed to:

• Define “Fraud” clearly.
• Assert our stance against all forms of fraudulent activity.
• Summarize the End User’s responsibilities in preventing fraud.
• Provide guidance on actions to be taken by all parties when there is a suspicion of fraudulent activity by us, the DSPs, or any other third party.
• Clarify responsibilities for conducting investigations into suspected fraudulent activities.
• Offer protection to rights holders who might be victimized as a result of fraudulent activities.

This document should be read in conjunction with our Privacy Policy and Terms of Use, and serves as a guide for understanding and adhering to our Anti-Fraud measures.

Definitions

End User

The individual or legal entity that has entered into a contractual relationship with BDM NETWORK for the use of our platform, accepting the Terms of Use and supplying content for availability on Digital Streaming Platforms (DSP).

DSP (Digital Streaming Platforms)

Platforms such as Spotify, Apple Music, Tidal, etc., or any other channels that have a contractual relationship with us.

Fraud

Any activity that violates the law, DSP Policies, or our policies. Examples include:

• Unauthorized use of copyrighted material (Copyright Infringement).
• Violation of laws regulating legal rights ownership.
• Misleading use of artist, band, or label names or artwork, creating confusion or false expectations (Musical Spam and Misleading Content).
• Using automated digital bots or similar means for Click Fraud, leading to unnatural and fraudulent revenues.
• Uploading distorted music, silenced songs, or content with deceptive features to generate revenue.
• Using manual or automated bots to stream and monetize DSP content in violation of their terms.

Policy

Fraudulent Activities: Our Stance and Impact

Fraudulent activities are fundamentally wrong and categorically unacceptable. They cause:

1. Loss Beyond Us and DSPs: Fraud undermines copyrights, tarnishes reputations, and reduces the royalty pool available to creators.
2. Reputational Damage: Fraud negatively impacts our reputation and agreements with DSPs, affecting all users of our services.

What Digital Music Services (DMS) are Doing About It

DSPs use algorithms and human oversight to detect fraud. If fraudulent activity is identified:

• Content may be removed.
• Earnings from suspicious activity may be withheld.

Our Actions Against Fraud

We proactively monitor for fraud through:

1. Sales Data Monitoring: We combine sales data with social media and artist profiles to detect irregularities.
2. Content Fingerprinting: Tracks are checked against databases to prevent duplicate uploads or unauthorized use.
3. Quality Control (QC): Metadata is reviewed to prevent Musical Spam, Misleading Content, and other types of fraud.

Handling Suspected Fraud

When suspected fraud is detected, we:

• Issue warnings using our Strike Policy System.
• May withhold revenues tied to content violating our Terms of Use.

Consequences of Fraudulent Use of Our Platform or Services

• Contract Termination: Breaching our Terms of Use may result in the termination of the contractual relationship.
• Recoupment of Funds: Fraudulently derived amounts may be withheld or recovered.
• Liability for Costs: Users may be held responsible for associated costs, including legal fees.

Severity, Strike Policy, and Account Blocking

Severity Levels

We classify fraud into four tiers:

1. F0: Critical issues like fake account information or identity evasion.
2. F1: Click Fraud, Misleading Content, or Musical Spam.
3. F2: Copyright, Intellectual Property, or Trademark issues.
4. F3: Abusive usage of Monetization through Digital Fingerprinting Systems (MDFS).

Strike Policy

Violations are addressed through a three-strike system:

1. Strike 1: Warning issued, questionable content taken down.
2. Strike 2: Three-month royalty payment delay, warning of account blocking on next strike.
3. Strike 3: Account blocked, catalog removed, royalties held in escrow.

Blocked Account Policy

Accounts with repeated violations may be blocked. Consequences include:

• Discontinuation of service.
• Catalog-wide takedowns.
• Legitimate royalties held in escrow for 24 months to 5 years.

Withholding Royalties (“Escrow”) for Blocked Accounts

Revenues tied to suspected fraudulent activity may be withheld in escrow for 24 months to 5 years, based on DSP policies and legal requirements.

Takedowns

1. Infringing Content Removal: All associated content will be removed.
2. Catalog-wide Takedowns for F3 Issues: Entire catalogs may be removed for severe violations.
3. DSP-Initiated Takedowns: DSPs may independently mark content as suspicious and remove it.