Spotify has agreed to pay $43 million to settle a class action lawsuit alleging that the streaming service failed to pay proper royalties to thousands of songwriters.
Under the terms of the agreement, which must be approved by a judge, the streaming service will set up a $43.4 million fund to pay song owners for past uses, as well as procedures to pay class members ongoing royalties that could “easily total tens of millions of dollars.”
Services like Spotify pay mechanical royalties through the Copyright Act’s Section 115, which allows them to automatically obtain a license for a set rate. But that provision requires that they file a formal “notice of intent” with the Copyright Office – something the plaintiffs in the lawsuit alleged Spotify did not do.
The case is Melissa Ferrick et al v. Spotify USA Inc. et al., case number 1:16-cv-08412, in the U.S. District Court for the Southern District of New York.
