Spotify Sued for Allegedly Underpaying Songwriters

Streaming platform Spotify is facing legal action in the United States for allegedly underpaying songwriters, composers, and publishers. The Mechanical Licensing Collective (MLC) has filed a lawsuit in New York, claiming that Spotify reclassified its subscription services, leading to a drastic reduction in royalty payments.

The Lawsuit

The lawsuit accuses Spotify of reclassifying its Premium Individual, Duo, and Family subscription plans as Bundled Subscription Offerings, which include audiobooks. This reclassification has resulted in significantly lower royalties being paid out to songwriters and music publishers, with MLC estimating that the impact could amount to tens of millions of dollars.

Spotify’s Response

In response to the lawsuit, Spotify has stated that the terms in question were agreed upon by publishers and streaming services years ago. The company defended its actions by claiming that it paid a “record amount” in royalties last year and is set to increase that amount in the coming years. Spotify emphasized that it looks forward to a quick resolution of the matter.

The underpayment of royalties by Spotify could have significant financial consequences for songwriters and music publishers. MLC warned that if not addressed, Spotify’s actions could lead to hundreds of millions of dollars in losses for these creators. The lawsuit highlights the ongoing challenges faced by artists in the digital streaming era.

This legal battle sheds light on the complexities of the music industry’s relationship with streaming platforms. As more music is consumed online, ensuring fair compensation for creators has become a major point of contention. The outcome of this lawsuit could set a precedent for how streaming services handle royalty payments in the future.

The lawsuit against Spotify underscores the importance of transparency and accountability in the music streaming industry. Songwriters and music publishers deserve to be fairly compensated for their work, and it is crucial for platforms like Spotify to uphold their obligations. The outcome of this legal battle will have far-reaching implications for the future of digital music distribution.