Spotify Hit With FTC Complaint by Songwriters Association Over Royalties

The National Music Publishers’ Association, a trade group that represents music publishers and songwriters, filed a complaint with the US Federal Trade Commission on Wednesday about Spotify Technology SA’s decision to provide audiobooks to subscribers, which resulted in reduced royalty payments to songwriters.

The audiobooks addition gave Spotify leeway to reclassify its premium subscription offering as a “bundle.” Under a complicated system set by the US Copyright Royalty Board, that qualifies Spotify to pay a discounted rate to songwriters since it’s now paying for the licensing of books and music under the same subscription price.

The NMPA alleges in its complaint that the bundle is unlawful since subscribers were automatically rolled in, with no option to remain on a music-only tier, which doesn’t yet exist in the US. Payments to songwriters could drop by around $150 million over the next year as a result, according to the NMPA.