Songwriter, musician, and dedicated music copyright activist David Lowery has retained a law firm and filed an ambitious class action lawsuit against Spotify. He's suing on behalf of all the artists — which could be literally any number of artists — that he claims Spotify is stiffing. Yesterday, Lowery filed his ambitious complaint against the streaming service in the Central District Court of California. First reported by Billboard, Lowery's suit seeks $US150 million in damages for unlawfully, knowingly, and wilfully reproducing and distributing the work of others without obtaining a mechanical licence. A mechanical licence is a licence that grants someone — say, Spotify — the right to distribute copyrighted music. The complaint accuses Spotify of direct infringement, which is the unauthorised copying and use of songs and of unfair business practices in violation of California Business and Professional Code § 17200. Spotify owes musicians and publishers between $US17 and $US25 million, according to Billboard's report.
The complaint takes particular notice of the fact that Spotify announced last week that they were investing in building an administration system to ensure that rightsholders get paid on time and in full. Spotify's announcement said that the streaming service sets aside royalties for every song it plays where the rightsholder isn't immediately clear.
On his blog, Lowery characterised Spotify's announcement this way:
Last night Ed Christman reported in Billboard that Spotify has announced plans to develop a database to "properly manage royalties." Properly? Uh oh! Technically Billboards editors are going a little soft on Spotify here as the real problem is that Spotify apparently never licensed many of the songs in their catalogue in the first place. Which implies copyright infringement on a massive scale.
In the complaint, the existence of this fund "reflects Spotify's practice and pattern of copyright infringement". The claim that Spotify knew it was violating copyright law and did so willingly is important since, as the complaint points out, statutory penalties jump from $US750-30,000 per song to up to $US150,000 per song for willful infringement.
The complaint further claims that the suit qualifies as a class action since all members (defined as everyone whose music was reproduced or distributed by Spotify without authorisation since 28 December 2012) share a common interest and would easily be found from Spotify's databases. Not only does the complaint ask for damages, it also seeks to enjoin Spotify "from continued copyright infringement and violations of the relevant portions of the Copyright Act". That would legally prevent Spotify from playing any of the songs owned by either Lowery or any other member of the class. If granted, that means that any song at issue would disappear from the Spotify catalogue.
Jonathan Prince from Spotify gave this comment on the case:
We are committed to paying songwriters and publishers every penny. Unfortunately, especially in the United States, the data necessary to confirm the appropriate rightsholders is often missing, wrong, or incomplete. When rightsholders are not immediately clear, we set aside the royalties we owe until we are able to confirm their identities. We are working closely with the National Music Publishers Association to find the best way to correctly pay the royalties we have set aside and we are investing in the resources and technical expertise to build a comprehensive publishing administration system to solve this problem for good.
Lowery is suing Spotify for millions of dollars, seeking to stop part of Spotify's operations, and opening up the class to potentially millions of artists. We'll see how Spotify responds in court.