Two U.S. senators have requested that the Federal Commerce Fee (FTC) examine Spotify as a result of allegations that the corporate bundled its music streaming and audiobook companies right into a dearer subscription with out acquiring person consent, whereas additionally lowering royalty funds to creators within the course of.
On Friday, June 20, U.S. Senators Marsha Blackburn and Ben Ray Luján wrote a letter to the FTC, claiming that Spotify transformed customary premium subscriptions into higher-cost bundled subscriptions with out informing shoppers. In addition they highlighted that present U.S. regulations allow digital music suppliers to pay a diminished music royalty charge if the subscription is bundled with different authentic choices.
“Spotify’s intent appears clear—to slash the statutory royalties it pays to songwriters and music publishers. Not solely has this harmed our inventive group, however this motion has additionally harmed shoppers,” the letter states.
Final yr, the Mechanical Licensing Collective (MLC) sued Spotify for allegedly undercompensating songwriters and publishers, however the lawsuit was dismissed in January.
In March 2024, Spotify restructured its Premium tiers to incorporate 15 hours of audiobooks, elevating the worth to $12 for people and $20 for households. Customers need to manually decide out of the plan.
This modification has reportedly triggered publishers to lose $230 million within the first yr, in response to Danielle Aguirre, govt vp of the Nationwide Music Publishers’ Affiliation.
In an announcement shared with Variety, a Spotify spokesperson famous that customers had been notified a month upfront in regards to the value improve and the platform affords “straightforward cancellations in addition to a number of plans for customers to think about.”