Spotify, an online music giant who made only $2.2 billion in the first half of 2016 while suffering through losses valued between $118.4 and $236.8 million, is accused of copyright infringement. The plaintiff, Wixen Music Publishing, Inc., asked the court for monetary relief totaling more than $1 billion USD. Wixen alleged in their federal lawsuit that Spotify continues to use thousands of songs, including the work of the late Tom Petty, without the proper license.
Lawsuit: Spotify Uses Third-Party Company for Licensing
According to the federal lawsuit, Spotify, headquartered in Sweden, uses a third-party company, Harry Fox Agency, to acquire the licensing that allows them to play music. Getting legal permission (through the person or company that owns the rights to the music) is a time consuming and expensive process. However, without the proper legal permission, the music cannot be played on Spotify.
This isn’t the first time that Spotify, through Harry Fox Agency, faces an accusation of dropping the ball on licensing. In 2016, Spotify was accused of not having the proper licenses and Harry Fox Agency had to correct their error.
Spotify also settled a matter involving the National Music Publisher’s Association for unpaid royalties in the amount of $30 million. Then, they settled a class-action lawsuit over copyright infringement for $43.3 million.
Harry Fox Agency states on their website that they are America’s “premiere licensing agent for securing mechanical licenses, working with publishers, artists, labels, and increasingly with new music services, products, and platforms.”
The plaintiff, Wixen Music Publishing, stated in the lawsuit that Harry Fox Agency was “ill-equipped to obtain all the necessary mechanical licenses.” Harry Fox Agency’s website also includes detailed information on their website related to mechanical licenses, how to obtain them, and the statutory rates related to them.
Spotify Is Currently Worth $20 Billion
Spotify hopes to continue to grow once it becomes a publicly traded company. It grew roughly 20% over the last year and is valued at around $20 billion. The company is considered the market leader in streaming music. According to Statista.com, Spotify had more than 60 million paying subscribers in 2017.