The music streaming giant Spotify has had two class-action lawsuits filed against it since late December 2015 over unpaid royalties and improperly licensed music.
Spotify is one of the leading music streaming services on the market, and users can browse its music library and customize what is played for them. On Dec. 28, 2015, artist David Lowry filed a class-action lawsuit against the company.
According to Billboard, this lawsuit claims Spotify, “...knowingly, willingly, and unlawfully reproduced and distributed copyrighted compositions without obtaining mechanical licenses.”
Additionally, Billboard has reported, “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.”
On the surface, this might not seem like a huge deal, however, in a world that is turning so devotedly to streaming, withholding royalties can essentially be withholding a large portion of money an artist makes. Because the lawsuit is class-action, more artists are able to join Lowry in taking action against Spotify, making it time-efficient for the courts and financially efficient for all of artists.
A nearly identical lawsuit was filed 11 days later on Jan. 8, 2015 making the bold statement that instead of finding the means to properly license some of the music it is providing to their listeners, Spotify, “...elected instead to engage in wholesale copyright infringement.”
Spotify has responded to these allegations, and according to Jonathan Prince, the company’s global head of communications and public policy, “We are committed to paying songwriters and publishers every penny. Unfortunately, especially in the United States, the data necessary to confirm the appropriate rights holders is often missing, wrong, or incomplete. When rights holders are not immediately clear, we set aside the royalties we owe until we are able to confirm their identities.”
Many legal figures in the music industry are unimpressed with this statement. The chief reason is because allegedly, the people at Spotify knew there were problems with their music licensing systems from the beginning, but out of neglect or greed, they did nothing to solve those problems, according to Billboard.
“The real issue is that Spotify built limited-to-no systems to get licenses, accept data and make payments,” explains Jeff Price to Billboard, the CEO and founder of Audim, a royalties collection agency for musicians.
He continues, “It took the world’s music without, in many cases, knowing whose music it was, and used it with no licenses and without making payments.”
BYU–Hawaii student Rachel Chambers, a freshman from Utah with an undecided major said, “As unpopular as it probably is to our ‘give it to me now and free’ culture that we have, if you’re not paying the artist, you have no right to use the music. When they work so many hours and work so hard, and no one gets paid for it, then they can’t keep doing it.”
According to Billboard, Prince claims Spotify is trying to solve this problem, saying, “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.”
If these NMPA talks go the way they are intended, both lawsuits could be dismissed, artists could claim their previously unpaid royalties, and Spotify will emerge with a more honorable method of distributing royalties and licensing music, according to Billboard.