Spotify Sued For $1.6 Billion
Wixen Music Publishing has sued Spotify for allegedly using thousands of songs without license and compensation. The Wixen suit accuses Spotify of failure to “comply with the requirements of Section 115 of the Copyright Act” and of failing to obtain either a direct license or a compulsory license to use the songs in their catalogue. The lawsuit is reportedly seeking damages worth at least $1.6 billion, plus injunctive relief. It was filed in California last Friday.
In its lawsuit, Wixen said Spotify failed to address the claims of songwriters and publishers, which have separate rights to the compositions. Recorded songs generally fall under two separate copyrights: one for the sound recording, typically owned by the record label, and one for the musical composition, typically owned by the songwriter and publisher. Wixen said: “As a result 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.”
This lawsuit is the latest development in a long-standing dispute over the streaming rights compensation split between labels and publishing companies. Spotify has a relationship with the three music labels, Warner, Universal, and Sony, as well as a catch-all deal with Merlin that give Spotify access to music from thousands of smaller labels. The deals have been an important new source of revenue for the music industry.
Spotify has been hit with several lawsuits over its alleged failure to pay royalties on a song’s musical composition. Spotify reached a settlement for a reported $30 million with the National Music Publishers Association in 2016 regarding similar claims. Last May, Spotify agreed to a $43 million settlement in a similar case, which a judge still needs to approve.
Wixen Music Publishing licenses music from about 200 artists. The publishing company owns works by Tom Petty, Neil Young, Weezer, and the Doors, amongst others. In September, many of these artists spoke out against the settlement proposed in May, but did so through a court statement filed by Wixen. That statement objected to the terms of the settlement, saying it would yield less than $4 per song.
Other firms have also filed suit. Bob Gaudio, a founding member of Frankie Valli and the Four Seasons, and Bluewater Music Corporation filed lawsuits against the company in July. A representative for Spotify declined to comment on the lawsuits.