Spotify Threatens Uruguay Exit As Lawmakers Consider Copyright Overhaul: ‘No Choice But To Suspend the Service’

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A nighttime thunderstorm as seen from Montevideo, Uruguay. Photo Credit: Baltasar Henderson

Spotify is reportedly threatening a full-scale exit from Uruguay as the nation of approximately 3.5 million residents considers a far-reaching copyright law modification.

Stockholm-headquartered Spotify’s straightforward position on the matter just recently entered the stateside news spotlight, though the streaming giant’s execs have for some time been speaking out against the proposed measure to regional media.

Already passed by Uruguay’s House and formally introduced in the Senate today, the legislation would amend articles 284 and 285 of the South American country’s chief copyright law, No. 9.739, per Montevideo-based El Observador.

According to the same source, the modifications would add social media services and other internet platforms (Spotify among them, of course) to the list of mediums from which musicians can “demand remuneration” for the use of their works.

As described in the legislation, Uruguay’s SUDEI would spearhead related negotiations, excepting instances wherein creators opt out and choose to seek the compensation on their own, El Observador indicated.

In any event, while the lawmakers who support the pivot have described it as a simple transfer of income from other rightsholders to domestic musicians, Spotify has made clear its position that the development would disrupt existing licensing pacts and compel it to make overlapping payments to continue operating in Uruguay.

“Thanks to streaming,” reads the English translation of a letter that Spotify is said to have sent government officials, “the music industry in Uruguay grew by 20% in 2022 alone. We want to continue giving artists the opportunity to make a living from their art and fans in Uruguay the opportunity to enjoy and be inspired by it.

“If these items are included in this bill and Spotify is forced to pay twice,” the message proceeds, “we will have no choice but to suspend the service in Uruguay.”

Driving home the position, Spotify has also reiterated that it pays out the majority of its revenue to rightsholders and that it isn’t yet profitable in Uruguay (or overall, for that matter), according to Madrid’s El País.

The latter outlet relayed that the Uruguayan Senate will have 45 days to review and decide upon the change. Needless to say, it’ll be worth monitoring the situation and the response of Spotify (which now charges $7.99 per month for premium in Uruguay) moving forward.

Separately, nearly three years have passed since Spotify was embroiled in a high-stakes government showdown – complete with the possibility of the cessation of local operations – in Turkey. Ultimately, the platform remained live in the country and, to be sure, raised its prices in late July of 2023.