A Not-So-Happy New Year for Spotify

The music industry was no stranger to legal controversies in 2015, and it appears 2016 will provide no reprieve, at least for interactive streaming giant Spotify. Within a two-week period, Spotify has been hit with not one, but two class action copyright infringement suits. The first suit, brought by artist Michael Lowery, is seeking damages of $150 million, and the second, brought by artist Melissa Ferrick, is seeking damages of $200 million. Both suits concern the absence of mechanical licenses for a number of songs offered on the Spotify platform. A mechanical license controls the right to exploit a song’s composition, and royalties are paid to the songwriter. When a streaming platform exploits a song that embodies a songwriter’s composition, they are legally obligated to send notice either to the writer himself or to their Performing Rights Organization, such as ASCAP or BMI. The plaintiffs in both suits allege that, while Spotify offers a large number of songs embodying their compositions, the writers never received notice of Spotify’s use of those songs, neither did they receive any royalty compensation. They further allege that Spotify’s failure to obtain the proper licenses was intentional. Spotify admits that there are songs in its repertoire where no mechanical royalty is paid out to anyone, but claims “honest mistake” due to lack of available data. Whether Spotify’s actions are sufficient to constitute copyright infringement worth hundreds of millions of dollars is now left to the courts.