Due to claims that Spotify reduced royalties to creators while bundling its music streaming and audiobook services into a more costly subscription without getting user consent, two U.S. senators have asked the Federal Trade Commission (FTC) to look into the matter.
In a letter to the FTC on Friday, June 20, U.S. Senators Marsha Blackburn and Ben Ray Luján accused Spotify of converting regular premium memberships into more expensive packaged subscriptions without telling customers. Additionally, they emphasized that current U.S. laws allow digital music companies to pay a lower music license rate if the subscription is combined with other acceptable products.
“It appears like Spotify wants to reduce the statutory royalties it pays to music publishers and songwriters. The letter claims that this action has hurt consumers in addition to our creative community.
Spotify was sued by the Mechanical Licensing Collective (MLC) last year for allegedly underpaying publishers and songwriters, but the case was dropped in January.
Spotify redesigned its Premium tiers in March 2024 to include 15 hours of audiobooks, for $12 for individuals and $20 for families. Opting out of the plan must be done manually by users.
Danielle Aguirre, executive vice president of the National Music Publishers’ Association, claims that publishers have lost $230 million in the first year as a result of this shift.
A Spotify representative told Variety in a statement that the service provides “simple cancellations as well as numerous plans for users to consider” and that users were informed one month in advance of the price rise.
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