Spotify has formally requested that a court dismiss a lawsuit filed against it by the Music Licensing Collective (MLC), which alleges that the streaming giant has unlawfully reduced mechanical royalty payments to songwriters through its bundling of premium services. The lawsuit contends that Spotify’s introduction of premium bundles negatively impacts songwriter compensation. In its motion to dismiss, Spotify argues that the MLC has misunderstood its payment structure and asserts that its business practices are compliant with current licensing laws.
The MLC's lawsuit emerged amidst ongoing discussions about fair compensation in the music industry, particularly as it relates to streaming services and songwriters. The MLC is particularly focused on the regulations governing mechanical royalty payouts in the United States.
The legal implications of this case are significant, with estimates suggesting that if the MLC wins, Spotify may be obligated to pay out as much as $50 million to songwriters. Spotify’s adaptation of its payment tiers and introduction of new features such as access to audiobooks has sparked criticism from a faction of the music community, further complicating its relationship with rights holders.
As this lawsuit unfolds, it is being closely monitored as a critical moment for the future of music royalties and the ongoing debate over equitable compensation in the digital age. For more on the case, follow the developments at Music Business Worldwide.