Spotify Faces $1.6 Billion Copyright Lawsuit

Spotify was sued by Wixen Music Publishing last week for allegedly using thousands of songs, including those of Tom Petty, Neil Young and the Doors, without a license and compensation to the music publisher.

Wixen Music Publishing Inc. claimed in a lawsuit filed Dec. 29 that Spotify has infringed upon copyrights to 10,784 songs it administers, and is seeking $150,000 in statutory damages for each song. Spotify declined to comment.

Now, Spotify’s $43 million settlement with songwriters is being challenged in a new lawsuit from a publisher who says artists like Tom Petty and Neil Young deserve a lot more -- $1.6 billion more.

Spotify, owner of the world’s largest paid music service, settled a case with songwriters last year, a bid to end years of fighting ahead of its planned listing on the New York Stock Exchange. Many of the songwriters and their representatives, including Wixen, were unhappy with the settlement and have subsequently filed objections.

The music streaming company  failed to get a direct or a compulsory license from Wixen that would allow it to reproduce and distribute the songs, Wixen said in the lawsuit, filed in a California federal court.

Wixen also alleged that Spotify outsourced its work to a third party, licensing and royalty services provider the Harry Fox Agency, which was “ill-equipped to obtain all the necessary mechanical licenses”.

Streaming services need to acquire licenses from the individual or group that recorded the song -- often held by a record label -- as well as the songwriters, whose rights are usually administered by a publisher.

While Spotify had licensing deals with the biggest publishers, the lawsuit it settled last year involved smaller companies like Wixen that claimed they hadn’t granted rights to the streaming-music provider.

Spotify, which is planning a stock market listing this year, has grown around 20% in value to at least $19 billion in the past few months.

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