Spotify faces $212m copyright suit

NEW YORK • Spotify has been sued for copyright infringement in a US$150 million (S$212 million) case that accuses it of failing to properly license songwriting rights in the United States. The suit highlights an escalating fight over the complex system of royalties for online music.

David Lowery, the leader of rock bands Cracker and Camper Van Beethoven, and an outspoken advocate for musicians' rights in the digital age, filed the suit on Monday in federal court in California. It contends that the company makes many songs available on its service without properly securing - or paying for - "mechanical rights", which date back to the era of piano rolls, but are still a major kind of music copyright.

Mechanical rights refer to a copyright holder's control over the ability to reproduce a musical work. Lowery's suit contends that Spotify copies and distributes versions of his songs on its service, which streams music to some 75 million people around the world, 20 million of whom pay for monthly subscriptions.

In his suit, filed in the US District Court in Los Angeles, Lowery applied for class-action status, arguing that Spotify has failed to handle the mechanical licensing for a huge but unspecified number of songs by many songwriters.

Citing statutory damages for copyright infringement, which range from US$750 to US$30,000 - or US$150,000 for each instance of wilful infringement - Lowery's suit says that Spotify could be liable for up to US$150 million.

"We are committed to paying songwriters and publishers every penny," Mr Jonathan Prince, a spokesman for Spotify, said in a statement.

"Unfortunately, especially in the United States, the data necessary to confirm the appropriate rights holders is often missing, wrong or incomplete."

As streaming has grown, the songwriting rights - which are handled separately from those of recordings - have become more valuable and their licensing increasingly con- tested. Songwriters like Lowery often complain of low royalty rates or of not being paid at all, while online outlets and music publishers alike say incomplete or conflicting data often hampers proper accounting.

In October, Spotify removed from its service thousands of songs from Victory Records, an independent punk and metal label, after the label's publishing arm complained that Spotify was not paying for millions of streams. Spotify said it did not have enough data to resolve the issue, but Victory and Audiam, a company that administers its royalties, disputed this, saying it had provided data with years' worth of information.

Victory's songs were quietly restored to Spotify a few weeks later, but the issue has continued to simmer.

The National Music Publishers' Association estimates that 25 per cent of the activity on interactive streaming services such as Spotify are not properly "matched" to the right data to let songwriters and their publishers get paid.

Last week, Spotify announced that it would create a "comprehensive publishing administration system" to fix the problem of faulty royalty information.


A version of this article appeared in the print edition of The Straits Times on December 31, 2015, with the headline 'Spotify faces $212m copyright suit'. Print Edition | Subscribe