Spotify Will Pay $43M to Settle Songwriter Copyright Class Action Lawsuit

Spotify recently secured final approval for a $43 million settlement in their class action over alleged copyright infringement and unpaid royalties to songwriters.

The settlement was approved by a federal judge on May 22 and aims to resolve a class action lawsuit against Spotify.

Spotify has agreed to pay songwriters $43.45 million in past due royalties as well as ongoing royalties of $63.1 million. The settlement agreement also sets aside $13 million for Class counsel.

The settlement will cover any copyright owner whose songs or musical compositions were made available between Dec. 28, 2012 and June 28, 2017. According to the settlement order, there are more than 535,000 potential Class Members.

In late December 2015, the original complaint was filed against Spotify. The Spotify class action alleged that the music streaming service infringed upon copyrights by “[reproducing] and/or [distributing] […] copyrighted musical compositions using Spotify’s streaming service and offline listening service, without identifying and/or locating the owners of those compositions for payment or a notice of intent to reproduce.”

Shortly after the plaintiff filed the suit, Spotify motioned to move the litigation from California to New York where it conducts business.

According to the settlement motion, the recently approved settlement is the second Spotify has paid over copyright infringement issues. In March 2016, Spotify agreed to pay $30 million to the National Music Publishers Association (NMPA) for infringement of their mechanical licenses.

Although this new settlement stands to resolve many allegations against Spotify, the music streaming company still faces litigation.

Wixen Music Publishing Inc. represents thousands of songs by Tom Petty, Neil Young, and others, and previously objected to the settlement. The company filed a separate case in December and seeks $1.6 billion in damages for copyright infringement.

Copyright litigation can be risky and troublesome for streaming services such as Spotify, but a new bill recently approved by the House may help streaming services avoid such litigation in the future.

Current copyright law allows digital streaming services to file a notice and then receive an automatic mechanical license. However, many artists argue that streaming services take advantage of the system to avoid paying royalties, resulting in litigation over the issue.

The Music Modernization Act would create a “Mechanical Licensing Collective (MLC)” funded by digital streaming services. The MLC would grant blanket mechanical licenses to the services, allowing streaming and digital downloads.

The bill was unanimously approved by the House and recently received praise from the Senate Judiciary Committee, meaning it will soon be sent for a full Senate vote.

In addition to government approval, the bill is also supported by the music industry and digital streaming services such as Spotify. The overwhelming support for the bill may mean fewer copyright litigations in the future, should the bill be signed into law.

Top Class Actions will post updates to this class action settlement as they become available. For the latest updates, keep checking TopClassActions.com or sign up for our free newsletter. You can also receive notifications when this article is updated by using your free Top Class Actions account and clicking the “Follow Article” button at the top of the post.

The plaintiffs are represented by Steven G. Sklaver, Stephen E. Morrissey, Kalpana Srinivasan, Geng Chen, and Krysta Kauble Pachman of Susman Godfrey LLP; Henry Gradstein and Maryann R. Marzano of Gradstein & Marzano PC.

The Spotify Copyright Class Action Lawsuit is Ferrick, et al. v. Spotify USA Inc., et al., Case No. 1:16­-cv­08412, in the U.S. District Court for the Southern District of New York.

UPDATE: May 2019, the Spotify songwriter copyright class action settlement is now open. Click here to file a claim.