Spotify is facing a $1.6 billion lawsuit charging streaming music provider with playing tens of thousands of songs from without proper compensation.
A company representing thousands of songwriters including Tom Petty, Neil Young and Steely Dan has sued streaming music provider Spotify seeking at least $1.6 billion in damages.
Wixen Music Publishing of Los Angeles filed a lawsuit in federal court in California charging the Swedish tech company with playing tens of thousands of songs without licenses or compensation. The suit is seeking damages of at least $1.6 billion and a ruling to prevent Spotify from playing songs such as Petty’s Free Fallin’ until proper terms are reached.
«Spotify has built a billion dollar business on the backs of songwriters and publishers whose music Spotify is using, in many cases without obtaining and paying for the necessary licenses,» alleges the suit, filed Dec. 29 in U. S. District Court in L.A. The Hollywood Reporter earlier reported on the suit.
This is just the latest legal action facing Spotify, which declined comment on the lawsuit. Earlier this year, Spotify settled a class action lawsuit for $43.4 million and a separate lawsuit with the National Music Publishers Association for $30 million.
Those cases also charged Spotify with playing music without proper licensing and compensation. Spotify has maintained it wants to properly compensate for the music it streams, but has not always been able to find the data to identify rights holders.
Spotify, which has 60 million subscribers, could be valued as high as $20 billion, CNBC has reported, when it goes public later this year with a planned direct listing on the New York Stock Exchange that bypasses a traditional IPO.
Meanwhile, several other suits filed by songwriters and publishers still linger. But Spotify is likely looking forward to a possible legislative solution to how to handle licensing of songs.
The Music Modernization Act, a bill introduced two weeks ago in the U. S. House of Representatives, would make it easier for streaming services to acquire proper licenses and bolster royalty payments to copyright owners. Rep. Doug Collins, R-Ga., and Rep. Hakeem Jeffries, D-N.Y., hope to have the bill readied for President Trump’s approval soon.
That bill is what led Wixen, which administers song rights for artists, to file its lawsuit last week, says the company’s president Randall Wixen. That’s because the bill’s language, as it is currently written, could prevent copyright holders from getting past payments they think they deserve from Spotify or other streaming services.
«We are very disappointed that these services will retroactively get a free pass for actions that were previously illegal» unless a suit is filed before Jan. 1, Wixen said in a statement sent to USA TODAY. «Neither we nor our clients are interested in becoming litigants but we have been faced with a choice of forfeiting rights and damages, or taking action at this time. We regret that this otherwise admirable proposed bill has had this effect, and we hope that Spotify nonetheless comes to the table with a fair and reasonable approach to reaching a resolution with us.”
Follow USA TODAY reporter Mike Snider on Twitter: @MikeSnider .
