Spotify Being Sued for Unpaid Royalties

Music streaming service Spotify has been hit with a massive lawsuit claiming unpaid royalties. Cracker frontman David Lowery filed a class action lawsuit via the law firm Michleman & Robinson LLP that claims the company has knowingly reproduced and distributed copyrighted material without the proper licenses.

According to Billboard, the firm is seeking $150 million in damages, and accuses Spotify of not making payment to the various composers and songwriters of different tracks.

The lawsuit comes during a time when Spotify is already trying to negotiate a settlement with the National Music Publishers Association, which alleges a similar claim in that Spotify hasn’t obtained the proper licenses to host certain songs.

Jonathan Prince, Spotify’s global head of communications and public policy, said in a statement, "We are committed to paying songwriters and publishers every penny. Unfortunately, especially in the United States, the data necessary to confirm the appropriate rightsholders is often missing, wrong, or incomplete. When rightsholders are not immediately clear, we set aside the royalties we owe until we are able to confirm their identities. 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.”

Billboard reports that sources claim Spotify has set aside a reserve fund of $17 million to $25 million to pay royalties for “pending and unmatched song use.”

The lawsuit seeks to appoint Lowery the class representative, and his counsel as class counsel. This opens the lawsuit up to multiple musicians -- of which the suit claims there are over 100 and can be found easily by searching Spotify -- who feel they’re also owed royalties by Spotify.

The suit wants Spotify to be prohibited from further copyright infringement and to enlist a third party auditor to find the tracks on Spotify that do not have the proper mechanical licenses and then force the streaming site to remove said material until they get the proper licenses.

Lowery is asking for "restitution on Spotify's unlawful proceeds, including defendants' gross profits" as well as compensatory damages and statutory damages.

Maybe Taylor Swift had a point after all!