Additional information is now available on the lawsuit that pits Cheap Trick and Allman Brothers against Sony BMG. At the hear of the lawsuit is how royalties are handled for digital sales.

Digital Music News has an informative post and a copy of the complaint (PDF), which alleges Sony BMG has paid the artists and producers "only a miniscule percentage of royalties owed for licensing of the recordings" to various online music stores. For each 99-cent download, the plaintiffs say they receive about 4.5 cents.

The complaint claims Sony BMG wrongly treats digital sales the same as physical sales and underreports sales, takes unauthorized deductions (that are typical for physical sales, such as packaging and container deductions). It also takes issue with Sony BMG's withholding reserves, which is a necessary part of physical sales due to product returns. Obviously, there are no returns in digital sales.

For 1,000 downloads, the current method gives the artist $45.05 in royalties. It includes the following deductions: 15% for net sales deduction, a 20% container (packaging) deduction and a 50% audiophile deduction.

The "correct" method,claims the complaint, would result in royalties owed in the amount of $315.50.