The Mechanical Licensing Collective has filed a legal action against Spotify.
The legal claim was filed in the United States District Court for the Southern District of New York. The action seeks recovery of unpaid royalties for songwriters and publishers due under the compulsory mechanical blanket licence obtained by Spotify for the US.
The case relates to Spotify’s assertion that its Premium Individual, Duo and Family subscription streaming plans are now classed as bundles in the US because those plans included access to audiobooks.
Applying the rate formula applicable to bundled subscription offerings results in a reduction of the service provider revenue that Spotify reports in the US, which has already led to a row with the NMPA in the US.
“The MLC believes that Spotify’s position does not comply with applicable law and regulations,” said a statement. “The MLC has statutory authority to address Spotify’s noncompliance with its royalty payment obligations. The MLC is taking legal action to enforce these obligations and ensure that Spotify pays all royalties due from its use of songs on Premium plans.”
“The MLC was designated by the Register of Copyrights to administer the blanket licence and is the only entity with the statutory mandate to collect and distribute blanket licence royalties and take legal action to enforce royalty payment obligations,” said The MLC’s CEO Kris Ahrend. “The MLC takes seriously its legal responsibility to take action on behalf of our members when we believe usage reporting and royalty payments are materially incorrect.”
The MLC is seeking corrected usage reporting and associated unpaid royalties for periods dating back to March 2024, along with an order requiring compliance going forward.
"Spotify paid a record amount to publishers and societies in 2023 and is on track to pay out an even larger amount in 2024," said a Spotify spokesperson. "We look forward to a swift resolution of this matter."
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