A lawsuit has been filed against Spotify, the giant in music streaming, in a U.S. federal court for allegedly failing to pay millions of dollars to songwriters, composers, and publishers for streaming their works on the platform. The lawsuit was filed against the U.S. branch of the Swedish company (Spotify USA) in New York on Thursday by a collective known as the Mechanical Licensing Collective (MLC), which is a non-profit organization that collects and distributes royalties owed from music streaming services.
The lawsuit states that "on March 1, Spotify, without prior notice, reclassified its paid subscription services, resulting in an almost 50% decrease in the royalty payments associated with the MLC." MLC stated, "The financial consequences of Spotify's failure to meet its legal obligations are enormous for songwriters and music publishers." It added, "If this is not addressed, the impact on songwriters and music publishers due to Spotify's illegal failure to accurately report (the value of owed royalties) could reach hundreds of millions of dollars."
According to MLC, Spotify reclassified its subscription plans to bundled subscription offerings, which now include audiobooks. Additionally, the royalties paid on bundled subscriptions are significantly lower compared to previous subscription formats. MLC remarked, "Premium subscribers already have access to audiobooks, and no additional service was added."
