US District Court Rules In Favor Of Spotify Against Lawsuit Over Royalties
US District Court Rules In Favor Of Spotify Against Lawsuit Over Royalties
Strap – Mechanical Licensing Collective had complained that the streaming service misquoted its revenue to avoid paying millions of dollars
The US District Court in California has dismissed a lawsuit accusing Spotify of underpaying songwriting royalties for millions of songs.
District Judge Analisa Torres rejected a complaint from the royalty-gathering nonprofit Mechanical Licensing Collective (MLC), which argued that the streaming service misreported its revenue to avoid paying millions of dollars owed to the group.
A spokesperson for Spotify said the company was pleased with the decision.
Meanwhile, MLC said it would review the decision and "evaluate available options, including the right to appeal."
US laws allow streaming services to obtain a blanket license to music copyrights at a specific royalty rate.
The Copyright Office appointed the MLC to collect royalties for songwriters and music publishers.
Last year, the MLC sued Spotify after the latter added audiobooks. It claimed that Spotify wrongly recharacterized its Premium service as a bundle of music and audiobook streaming. This way, it could significantly reduce the music royalties.
It added that this was done despite, "no change to Spotify's Premium plan and no corresponding reduction to the revenues it generated."
The complaint estimated that Spotify's move could cost songwriters $150 million annually.
Ruling in favor of Spotify, Judge Torres held, "Audiobook streaming is a product or service that is distinct from music streaming and has more than token value. Therefore, the premium is properly categorized as a Bundle, and the allegations of the complaint do not suggest otherwise."
