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Daniel Ek
CREDIT: COURTESY OF DANIEL EK
UPDATED: Spotify has been hit with a $1.6 billion lawsuit from Wixen Music Publishing, which handles titles by Tom Petty, Neil Young, Steely Dan’s Donald Fagen, Weezer’s Rivers Cuomo, Stevie Nicks, and others. The suit, which alleges that Spotify is using thousands of songs without a proper license, was filed on Dec. 29 in California federal court. It is seeking damages worth at least $1.6 billion and injunctive relief.
Spotify has been plagued by complaints and legal action from the music-publishing industry, which widely feels that labels are getting the fairer share of royalties from the company. In May the company proposed a $43 million settlement to resolve a class-action suit from a collective of songwriters, including David Lowery and Melissa Ferrick, that in September was lambasted as being inadequate by a group of songwriters and actors; more lawsuits ensued.
Wixen’s lawsuit says the proposed settlement “does not adequately compensate Wixen or the songwriters it represents.” The suit continues, “Prior to launching in the United States, Spotify attempted to license sound recordings by working with record labels but, in a race to be first to market, made insufficient efforts to collect the required musical composition information and, in turn, failed in many cases to license the compositions embodied within each recording or comply with the requirements of Section 115 of the Copyright Act. Either a direct license from Wixen or a compulsory license would have permitted Spotify to reproduce and/or distribute the Works as part of the Service, including by means of digital phonorecord deliveries (“DPDs”), interactive streaming, and limited downloads. But Spotify failed to obtain either license type,” and instead outsourced that role to the Harry Fox Agency, which the suit says “Spotify knew … did not possess the infrastructure to obtain the required mechanical licenses and Spotify knew it lacked these licenses.”
Spotify filed court papers on Friday that questioned whether Wixen’s clients had authorized the company to take that action, claiming that it had given its clients only a brief opt-out period before their names would be included in the suit.
In a statement released Tuesday afternoon, company president Randall Wixen clarified that it and its clients are not taking part in the Music Modernization Act introduced late in December, which aims to simplify digital licensing and increase rates, or joining the class-action suit “in part because of their belief that the proposed settlement is inadequate, because too much of the settlement is going to legal fees, and because the terms of the go-forward license in the settlement are not in their long-term best interests.” Instead, the company says it “was and is desirous of sitting down with Spotify to work out an amicable settlement for its past infringements and unlicensed uses, and seeks to work out a go-forward license which is fair to all parties.
“We’re just asking to be treated fairly,” he continued. “We are not looking for a ridiculous punitive payment. But we estimate that our clients account for somewhere between 1% and 5% of the music these services distribute. Spotify has more than $3 billion in annual revenue and pays outrageous annual salaries to its executives and millions per month for ultra-luxurious office space in various cities. All we’re asking for is for them to reasonably compensate our clients by sharing a miniscule amount of the revenue they take in with the creators of the product they sell.”
A rep for Spotify declined Variety’s request for comment.
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