By Ethan Millman, Rolling Stone | Spotify has come out victorious in a lawsuit filed against the company last year over a controversial bundling strategy it adopted that led to decreased royalty payments to songwriters.
A federal judge dismissed the suit Wednesday, a significant win in a dispute between Spotify and much of the music publishing industry that began last year when Spotify introduced a new audiobooks bundle to its premium subscription. With that bundle, Spotify started to pay a lesser royalty rate to songwriters, maintaining such a move was backed by a settlement they’d reached with music publishers in 2022 through the Copyright Royalty Board that determined streaming services are allowed to pay less on music subscriptions bundled with other services.
The Mechanical Licensing Collective, the nonprofit responsible for issuing mechanical licenses to streaming services, sued Spotify last May, claiming that the service had incorrectly characterized the bundle and “unilaterally and unlawfully” began reducing the rate by as much as 50 percent without any warning.
In a memorandum filed Wednesday, the court determined that Spotify was within its rights, calling the bundling rule “unambiguous.”
“The only plausible application of the law supports Spotify’s position,” judge Analisa Torres wrote. “Under the facts as alleged, audiobook streaming is a product or service that is distinct from music streaming and has more than token value. Premium is, therefore, properly categorized as a Bundle, and the allegations of the complaint do not plausibly suggest otherwise.”
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https://www.msn.com/en-us/music/news/spotify-wins-lawsuit-over-bundling-controversy-that-lowered-payments-to-songwriters/