A guitarist and vocalist from the rock band “Cracker” has filed a lawsuit against the music-streaming service Spotify. The musician – David Lowery – seeks $150 million in damages from Spotify. He alleges that Spotify knowingly, willingly, and unlawfully reproduces and distributes copyrighted music without a license to do so. The number was derived from the standard fine of $750-$150,000 per infringement for a violation of federal copyright law. Lowery is suing on behalf of himself and all other similarly situated artists.
Spotify is a Swedish commercial music streaming, podcast and video service. It provides digital rights management-protected content from record labels and media companies. Its business model is to offer a free service. They also have premium subscriptions for $9.99 per month that remove advertisements and allow users to download music for offline listening. Although Spotify has stated that it plans to completely compensate every songwriter and publisher, sometimes the necessary data to confirm the right-holder is absent, and the royalties are set aside until they can be identified. According to Lowery’s lawyers, this is sufficient to prove Spotify’s knowledge that it was violating copyright law. The plaintiffs in this class are those who were never contacted by Spotify in order to design a contract granting Spotify the right to play their music in exchange for royalties.
Other companies that offer music-streaming services include Rhapsody, Amazon Prime, and Apple Music. With similar policies in practice in regards to royalties, these companies may too soon be at risk. Pandora reached a settlement to pay record companies $90 million for not acquiring the proper licensing to play certain “oldies” music. Pandora and Sirius XM, which settled a similar suit against it, follow the federal law that recordings made prior to 1972 do not receive copyright protection. However, states such as New York have different laws that do grant copyright protection to these recordings. Currently, both Pandora and Sirius are facing a lawsuit. It was brought by the 1960’s group The Turtles for copyright violation of their music under state law.
If Lowery wins this class-action lawsuit for the asking $150 million, every songwriter who falls within this class (all those who haven’t given Spotify a direct license or been paid all of their royalties) will be entitled to an equal split of the $150 million. This is no matter how many songs they’ve released or how many streams those songs have received.