Mechanical Licensing Collective (MLC), a non-profit organization that collects and distributes royalties from music streaming services, has sued Spotify in the US.

The lawsuit alleges that Spotify reclassified its paid subscription services on March 1 without prior notice, resulting in a reduction in royalty payments to MLC of approximately 50 percent.

"THE IMPACT COULD BE IN THE HUNDREDS OF MILLIONS OF DOLLARS"

"The financial consequences for Songwriters and Music Publishers of Spotify's failure to fulfill its legal obligations are enormous. Left unchecked, the impact of Spotify's unlawful underreporting on Songwriters and Music Publishers could reach hundreds of millions of dollars."

According to the MLC, Spotify reclassified its Premium Individual, Duo and Family subscription streaming plans as Bundled Subscription Offerings because they now include audiobooks.

The royalties paid for bundled services are significantly less.

FIRST STATEMENT FROM SPOTIFY

Spotify said in a statement that the lawsuit is about terms that publishers and streaming services agreed to and celebrated years ago.

The digital music platform also said it paid a record amount in royalties last year and is on track to pay an even larger amount in 2024.

"We expect this matter to be resolved quickly," the Swedish company said in a statement.

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PAID 9 BILLION DOLLARS IN 2023 

In February, Spotify said it paid $9 billion to musicians and publishers last year, with about half of that going to independent artists.

Editor: David Goodman