Spotify Has Been Hit with a $150 Million Class Action Lawsuit Over Unpaid Royalties

There’d been rumblings that something was not right with the royalties being paid out by Spotify. David Lowery (Cracker, Camper Van Beethoven) has had his eye on Spotify from the very beginning and was always suspicious about what who was being paid what.  And now he thinks he has enough evidence to sue. From Billboard:

David Lowery, retaining the law firm of Michelman & Robinson, LLP, has filed a class action lawsuit seeking at least $150 million in damages against Spotify, alleging it knowingly, willingly, and unlawfully reproduces and distributes copyrighted compositions without obtaining mechanical licenses.

The lawsuit comes amidst ongoing settlement negotiations between Spotify and the National Music Publishers Assn. over the alleged use of allowing users to play music that hasn’t been properly licensed, and also without making mechanical royalty payments to music publishers and songwriters. According to sources, Spotify has created a $17 million to $25 million reserve fund to pay royalties for pending and unmatched song use.

The lawsuit was filed on Dec. 28 in the Central District Court of California.

According to the complaint, Spotify has unlawfully distributed copyrighted music compositions to more than 75 million users, but failed to identify or locate the owners of those compositions for payment, and did not issue a notice of intent to employ a compulsory license.

The complaint states that Spotify has “publicly” admitted its failure to obtain licenses and created a reserve fund of millions of dollars for royalty payments which have been “wrongfully withheld from artists.” The use of songs not lawfully licensed “creates substantial harm and injury to the copyright holders, and diminishes the integrity of the works,” the complaint states.

Continued.

Apparently, Canadian artists are affected, too. I’m going to follow up on that part of the story. Stand by.