Technology

Spotify sued for $1.6bn over unpaid royalties

Music streaming service faces claim on behalf of artists including Neil Young and Janis Joplin

Wixen is seeking damages of $150,000 per song, for more than 10,000 songs. Photograph: iStock

Wed Jan 3 2018 - 16:46

Music streaming service Spotify has been sued by a music publishing company for $1.6 billion (€1.3 billion), for hosting songs it allegedly doesn't have the full rights to.

Wixen, a Californian company that collects royalties on behalf of artists including Tom Petty, Neil Young, Janis Joplin and the Doors, alleges that Spotify "took a shortcut" when it agreed deals with major labels to host their back catalogues.

The suit states that under the US Copyright Act, each song has two copyright claims: one to the recording, and the other to the composition. Wixen claims that Spotify didn’t obtain the composition rights in their deals, and is seeking damages of $150,000 per song, for more than 10,000 songs.

Spotify has not yet commented on the suit, but has faced similar claims in the past. In 2015, the company launched a “publishing administration system” to more fully recompense royalty holders, after metal label Victory Records claimed it was missing out on composition royalties, but Spotify has nevertheless faced further lawsuits since.

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Settled

In 2016, it paid over $20 million in outstanding royalties to a number of publishers via the National Music Publishers’ Association, while in May 2017, it settled a case with three small publishers, including the estate of Jaco Pastorius, for over $43 million.

Spotify had two outstanding lawsuits filed against it in July 2017, from publishers including Bob Gaudio of the group Frankie Valli and the Four Seasons.

The company is the most successful in the music streaming business, with more than 60 million paying subscribers.

It is reportedly valued at $19 billion, and is expected to be floated on the stock market later this year.

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