Spotify Wins Lawsuit Over Royalty Bundling Strategy

Spotify has successfully defended itself against a lawsuit filed by the Mechanical Licensing Collective (MLC) regarding its bundling strategy that lowered royalty payments to songwriters. The lawsuit claimed Spotify unlawfully reduced royalties by recharacterizing its Premium subscription, which now includes audiobooks, as a bundle. A U.S. federal judge ruled in favor of Spotify, stating that the company's bundling practice was supported by existing regulations and that audiobook streaming is distinct from music streaming. This decision is based on a 2022 legal settlement, Phonorecords IV, allowing bundled services to pay lower rates. The lawsuit alleged potential losses of $150 million for songwriters, but Spotify maintains that their approach aligns with industry standards and will still benefit creators in the long run.