MLC Challenges Spotify's Motion to Dismiss $150M Unpaid Royalties Lawsuit Over Bundling Dispute
The Mechanical Licensing Collective (MLC) is challenging Spotify's motion to dismiss their lawsuit regarding unpaid royalties from subscription bundle reclassifications. The dispute centers on how Spotify categorizes its subscription offerings and calculates mechanical royalties.
Orange MLC logo
Key Points of Contention:
- Spotify reclassified most Individual subscriptions as "bundles" with audiobooks, potentially saving $150 million annually in mechanical royalties
- MLC argues these packages don't qualify as legitimate bundles under Section 115, citing audiobooks' "token" value
- Spotify contends audiobooks represent a distinct product tier eligible for bundle classification
- The timing of audiobook integration (November 2023) and accessibility of audiobook-only tier are disputed factors
The MLC's Opposition Arguments:
- Claims Spotify's inconsistent reporting of Premium offerings requires further examination
- Argues the complaint meets plausibility standards for proceeding with litigation
- States dismissal would be premature at this stage of proceedings
NMPA music bundling image
Man wearing green shirt at screen
The outcome of this case could significantly impact how streaming services structure their subscription offerings and calculate royalty payments to music creators. The MLC maintains that current practices have a "devastating financial impact" on creators who depend on streaming revenue.
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