The Legal Battle for Fair Compensation: Spotify Sued for Underpaying Songwriters

The Legal Battle for Fair Compensation: Spotify Sued for Underpaying Songwriters

A recent lawsuit filed in a US federal court has brought to light the accusations against music streaming giant Spotify, claiming that they have been underpaying songwriters, composers, and publishers by tens of millions of dollars. The Mechanical Licensing Collective (MLC), a non-profit organization responsible for collecting and distributing royalties from music streaming services, filed the lawsuit against Spotify U.S. in New York. The suit alleges that Spotify made changes to its paid subscription services on March 1 without providing advance notice, resulting in a staggering 50 percent reduction in royalty payments to MLC. This move has raised concerns about the impact on the financial well-being of songwriters and music publishers.

According to MLC, Spotify reclassified its Premium Individual, Duo, and Family subscription streaming plans as Bundled Subscription Offerings due to the inclusion of audiobooks. This reclassification has led to significantly lower royalties paid out to songwriters and publishers. MLC argues that Premium subscribers already had access to audiobooks, and there was no additional content bundled with the service. This change in classification has sparked a legal battle over the fair compensation of songwriters and composers, with potentially hundreds of millions of dollars at stake.

In response to the lawsuit, Spotify issued a statement defending its actions, stating that the terms in question were agreed upon by publishers and streaming services years ago. The company emphasized that it paid a “record amount” in royalties last year and is projected to pay an even larger sum in 2024. Spotify also highlighted that it had paid out $9 billion to musicians and publishers the previous year, with a significant portion going to independent artists. Despite these figures, the legal battle underscores the ongoing struggle for fair compensation in the music industry.

As the legal proceedings continue, the music industry is closely watching the outcome of the lawsuit against Spotify. The case has reignited conversations about the importance of fair compensation for songwriters, composers, and artists in the digital age. With streaming services playing a significant role in music consumption, it is crucial to address issues of underpayment and royalties to ensure a sustainable future for the music industry. The legal battle between Spotify and MLC serves as a reminder of the complexities and challenges in achieving equitable compensation for music creators.


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