Artists Hit Spotify With $150M Copyright Action

LOS ANGELES (CN) - Spotify distributes copyrighted music to over 75 million users without paying artists or giving them notice that their work will be distributed, a class seeking $150 million in damages claims in Federal Court.

David Lowery, the lead singer of bands Camper Van Beethoven and Cracker, filed a class action for copyright infringement and unfair business practices against Spotify USA in the Central District of California on Monday.

According to the complaint, Spotify unlawfully reproduces and distributes copyrighted musical works to its users "despite its failure to identify and/or locate the owners of those compositions for payment or to provide them with notice of Spotify's intent to reproduce and/or distribute the works."

Spotify, a music streaming service that allows users to choose the music they listen to, says it has played more than 25 billion hours of music since it launched seven years ago.

Lowery claims Spotify admitted to its failure to pay owners of copyrighted works by creating "a reserve fund of millions of dollars wherein the royalty payments Spotify wrongfully withholds from artists are held." Lowery, who has written more than 150 songs for his bands Cracker and Camper Van Beethoven, says he and the "hundreds or thousands of class members" never gave Spotify authorization to reproduce or distribute their works.

Mona Hanna, an attorney representing the class with Michelman & Robinson, told Courthouse News that Spotify knew Lowery objected to the use of his songs without his consent, but "played them nevertheless."

"He has been very vocal with respect to his concerns and objections over his songs being played without his consent and approval," Hanna said.

The lawsuit lists "Almond Grove," "Get On Down the Road," "King of Bakersfield" and "Tonight I Cross the Border" - songs that Lowery performed with Cracker - as illegally reproduced by Spotify for its users.

Ultimately, the class wants Spotify to pay artists for using their works.

"That's exactly the motivation behind the lawsuit," Hanna said. "It's not that we want them to remove the music, it's that we want them to pay the artists."

James Duffett-Smith, Spotify's global head of publisher relations, said last week that Spotify would be investing in "resources and technical expertise" to build a system to accurately identify the appropriate "rightsholder" for payment of royalties. Duffett-Smith said Spotify has paid out more than $3 billion in royalties.

"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," Jonathan Prince, Spotify's global head of communications, said in a statement to Courthouse News.

"When rightsholders are not immediately clear, we set aside the royalties we owe until we are able to confirm their identities," Prince said. "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."

The class claims Spotify admitted in May 2014 to the U.S. Copyright Office that it "may not be able to identify the copyright owners from the sound recordings provided to Spotify." The music streamer also failed to pay royalties to a publishing company about 21 percent of the time, the class says.

"I hope that Spotify acts in a corporately reasonable manner," says Sanford Michelman, the lead attorney for the class. "These individuals - especially songwriters - put their hearts and souls in their works."

Lowery seeks class certification, an injunction preventing Spotify from infringing on copyrighted works, restitution, and compensatory and statutory damages.

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