Swedish music streaming giant Spotify is facing a copyright infringement suit from a music rights publishing company and an indie rap label.
The suit marks the latest in a string of legal troubles for Spotify and criticisms of its business policies with respect to music licensing.
The company is now facing accusations that it has an “anti-competitive incentive” to damage indie music labels because it is not financially beneficial to stream their music.
Pro Music Rights (PMR) and hip-hop label Sosa Entertainment filed the suit at the US District Court for the District of Middle Florida yesterday, November 25.
In the complaint, the rights owners alleged that Spotify had removed all of the plaintiffs’ tracks from its platform as they were being “played too much” and were “costing too much money”.
PMR and Sosa alleged that Spotify had reneged on its obligations to pay royalties for more than 550,000,000 streams of their tracks while they were available on the platform.
According to the complaint, the problem stems from a licensing deal Spotify inked in April 2017 with the Music and Entertainment Rights Licensing Independent Network (Merlin).
Sosa, at the time a member of Merlin, would have been entitled to receive equity in Spotify under the agreement, the complaint said.
According to the plaintiffs, Spotify took down Sosa’s tracks from its platform as a “bad faith tactic to exert pressure on Merlin to exclude Sosa from the equity participation”.
Sosa subsequently entered into a partnership with PMR.
The companies are now hitting back at what it calls Spotify’s “blanket ban” against its music, which deprives its artists of access to one of the world’s most popular music streaming platforms.
They are seeking statutory damages of $150,000 for each act of willful infringement.
Earlier this year, WIPR reported that Spotify had been accused of wilfully infringing the copyright to hip-hop star Eminem’s early recordings.