Spotify confronts lawsuit over unpaid royalties to songwriters, publishers

(MENAFN) Spotify, the prominent music streaming platform, is facing legal action in a US federal court for allegedly failing to pay millions of dollars in royalties to songwriters, composers, and publishers. This lawsuit, filed against Spotify's American branch (Spotify USA) in New York on Thursday, was initiated by the Mechanical Licensing Collective (MLC), a non-profit organization responsible for collecting and distributing royalties owed by music streaming services.

The lawsuit details that on March 1, Spotify made significant changes to its paid subscription services without prior notice, resulting in an estimated 50 percent reduction in royalty payments to the MLC. This sudden reclassification has had a substantial financial impact on those dependent on these royalties. The MLC emphasized the severity of the issue, stating, “The financial consequences of Spotify’s failure to meet its legal obligations are enormous for songwriters and music publishers.” They further warned that if this issue is not addressed, the potential financial damage to songwriters and music publishers could reach hundreds of millions of dollars.

According to the MLC, Spotify restructured its subscription plans, which now bundle premium services with audiobooks under individual, duo, and family packages. This reclassification means that the royalties paid on these bundled subscriptions are significantly lower than those under the previous subscription models. The MLC argues that this change has unlawfully reduced the amount of royalties owed, significantly harming the financial well-being of those who create the music streamed on Spotify's platform. 

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