Spotify Slapped With $150M Lawsuit for Unpaid Royalties

A class-action lawsuit has been filed against streaming service Spotify. Billboard reported that artist rights advocate David Lowery and Camper Van Beethoven, retaining law firm Michelman & Robinson, LLP, has filed a class action lawsuit in damages against the music streaming service, Spotify, for knowingly, willingly, and unlawfully reproducing and distributing copyrighted compositions without obtaining the necessary licenses.

This is not the first lawsuit against the service. As noted, the class action comes just amidst the ongoing settlement negotiations between Spotify and the National Music Publishers Association, who also sued the company for allowing users to play music that wasn't licensed properly and for not making mechanical royalty payments to music publishers and songwriters. Sources say that Spotify has already created $17 million to $25 million reserve funds to pay for royalties for pending and unmatched song use.

Spotify global head of communications and public policy Jonathan Prince said in a statement, "We are committed to paying songwriters and publishers every penny. Unfortunately, especially in the United States, the data necessary to confirm the appropriate rightsholders is often missing, wrong, or incomplete. When rightsholders are not immediately clear, we set aside the royalties we owe until we are able to confirm their identities."

He went on, "We are working closely with the National Music Publishers Association to find the best way to correctly pay the royalties we have set aside and we are investing in the resources and technical expertise to build a comprehensive publishing administration system to solve this problem for good."

However, the complaint went on to state that while Spotify has "publicly" admitted its failure in obtaining licenses and created a reserve fund for the necessary royalty payments, the use of these not lawfully licensed songs "creates substantial harm and injury to the copyright holders, and diminishes the integrity of the works."

Newsweek noted that Lowery himself cited his own songs, "Almond Grove," "Get On Down the Road," "King of Bakersfield" and "Tonight I Cross the Border" as examples of works that the company unlawfully used.

The complaint has been filed as a class action due to the community of interest in the litigation and that the members of the said class will exceed a number over a hundred, all of whom are easily identifiable via discovery from Spotify's database.

The class action also allows for a more efficient litigation. At the same time, it conserves the resources of the parties involved, allowing for the court system to protect the rights of every member.