Spotify Now Faces One Big Fat Class Action Lawsuit

Spotify Now Faces One Big Fat $350 Million Lawsuit
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David Lowery and Melissa Ferrick’s class action lawsuits against Spotify have now been combined. The lawsuits were filed against Spotify in 2015 and 2016, respectively. Lowery filed a motion last year to consolidate his $150 million lawsuit with Ferrick’s similar $200 million lawsuit, which was filed shortly after Lowery’s. These amounts are estimated based on what the anticipated class action artist group could potentially claim for unpaid royalties.

With class action participants getting siphoned away, merging the lawsuits makes sense. On April 18th, Lowery asked a US District Judge to consolidate the lawsuits and appoint his counsel, Michelman & Robinson LLP, as lead. However, the request was in opposition to a similar motion filed by Melissa Ferrick’s counsel, Gradstein & Marzano PC.

Lowery and Ferrick both want their class action to prevail in court, which would see any other affected parties claiming damages as well. Obviously, Spotify doesn’t want this to happen and is trying to get as many independent songwriters and publishers as possible to sign a settlement agreement with the National Music Publishers Association (NMPA).

Lowery originally filed his lawsuit against Spotify on December 28th, 2015, alleging that Spotify knowingly and unlawfully reproduced and distributed compositions without obtaining mechanical licenses. Ferrick filed her lawsuit less than two weeks later, on January 8th, 2016.

Lowery and Ferrick claimed that Spotify is now using the NMPA settlement to cut class members out of the lawsuit. Maybe that strategy is working.

Spotify’s legal woes don’t stop there. In March 2018, Wixen Music Publishing filed a $1.6 billion lawsuit against Spotify, alleging that Spotify did not obtain proper licenses for songs by artists such as Tom Petty, Neil Young, and The Doors. In response, Spotify filed a motion to dismiss the lawsuit, claiming that Wixen Music Publishing failed to show that it represented the necessary parties to pursue the lawsuit.

Spotify’s legal issues with songwriters and publishers stem from the complex and often outdated system for licensing music. The system was created in the early days of recorded music and did not anticipate the advent of digital streaming services. As a result, there is no clear way for songwriters and publishers to be compensated for the use of their music on streaming services like Spotify.

The issue is further complicated by the fact that different types of licenses are required for different uses of a song, such as mechanical licenses for reproducing and distributing compositions and performance licenses for public performances.

The complexity of the licensing system has led to numerous lawsuits against Spotify and other streaming services. While Spotify has settled some of these lawsuits, others continue to drag on in court.

In the meantime, the music industry is pushing for modernization of the licensing system. In 2018, the Music Modernization Act was signed into law, which aims to streamline the licensing process for digital streaming services. The law creates a central database of musical works and sets up a system for distributing royalties to songwriters and publishers.

However, it remains to be seen whether the Music Modernization Act will actually solve the problems facing songwriters and publishers in the digital age. Until then, it’s likely that lawsuits like the ones filed by Lowery and Ferrick will continue to be a thorn in the side of streaming services like Spotify.