The Mechanical Licensing Collective (MLC) has launched a lawsuit against Spotify over alleged underpaid royalties related to the streaming platform's bundling practices. The dispute centers on Spotify's March 2024 decision to classify its Premium Individual, Duo, and Family plans as bundled subscription offerings by including audiobook access.

According to the lawsuit filed in the U.S. District Court for the Southern District of New York, Spotify's bundling strategy reduces the reported service provider revenue, resulting in lower royalty payments. The MLC contends these bundled plans violate applicable laws and regulations.

Key points of the lawsuit:

• MLC seeks recovery of unpaid royalties from March 2024 onward
• The organization demands corrected usage reporting
• MLC wants a court order requiring future compliance
• MLC has statutory authority to enforce royalty payment obligations

"The MLC takes seriously its legal responsibility to take action on behalf of our Members when we believe usage reporting and royalty payments are materially incorrect," states MLC CEO Kris Ahrend.

Since January 2021, the MLC has distributed over $2 billion in royalties to songwriters and music publishers at no cost to them. The organization serves as the designated administrator of the blanket compulsory license for digital services' use of musical works.

Case number: 1:24-cv-03809

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