Just days after a Twitter thread made headlines for its opposing views as to whether or not the music streaming service Spotify pays appropriate royalties, a lawsuit has been filed, seeking $1.6 billion from the streaming giant.
As Variety reports, Wixen Music Publishing, who handles the music from artists such as Neil Young, Tom Petty, The Black Keys Stevie Nicks, Rage Against The Machine, and Rivers Cuomo of Weezer, has filed a lawsuit against Spotify, claiming they have been using thousands of songs without a proper license, and have been handing “outrageous annual salaries to its executives”.
While Spotify has been hit with complaints and threats of legal action for years now, the company was involved in a class-action suit from a group of songwriters back in May. Spotify proposed a $43m settlement at the time, but that amount was subsequently criticised for being inadequate.
The lawsuit, filed on Friday, December 29th by Wixen Music Publishing, claims that the $43m settlement “does not adequately compensate Wixen or the songwriters it represents.”
“Prior to launching in the United States, Spotify attempted to license sound recordings by working with record labels but, in a race to be first to market, made insufficient efforts to collect the required musical composition information and, in turn, failed in many cases to license the compositions embodied within each recording or comply with the requirements of Section 115 of the Copyright Act,” the suit alleges.
“Either a direct license from Wixen or a compulsory license would have permitted Spotify to reproduce and/or distribute the Works as part of the Service, including by means of digital phonorecord deliveries (“DPDs”), interactive streaming, and limited downloads.”
The suit claims that Spotify did not manage to get either of these linceses, and instead recruited the Harry Fox Agency to do so. The lawsuit claims that Spotify was aware that the Harry Fox Agency “did not possess the infrastructure to obtain the required mechanical licenses and Spotify knew it lacked these licenses.”
Never miss industry news
Get the latest music industry news, insights, and updates straight to your inbox. Learn more
The timing of this lawsuit happens to coincide with the US Music Modernization Act, which was introduced last month. The bill aims to simplify digital licensing, but would also affect the ability of music publishers to sue streaming services such as Spotify for infringing mechanical copyrights after January 1st, 2018.
“We are very disappointed that these services will retroactively get a free pass for actions that were previously illegal unless we actually file suit before January 1, 2018,” stated Randall Wixen. “Neither we nor our clients are interested in becoming litigants but we have been faced with a choice of forfeiting rights and damages, or taking action at this time.”
“We’re just asking to be treated fairly,” Wixen continued. “We are not looking for a ridiculous punitive payment. But we estimate that our clients account for somewhere between 1% and 5% of the music these services distribute. Spotify has more than $3 billion in annual revenue and pays outrageous annual salaries to its executives and millions per month for ultra-luxurious office space in various cities.”
Spotify is yet to make any public statement in regards to the lawsuit.