Two U.S. senators have requested that the Federal Commerce Fee (FTC) examine Spotify as a consequence of allegations that the corporate bundled its music streaming and audiobook companies right into a dearer subscription with out acquiring consumer 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 customers. In addition they highlighted that current U.S. rules allow digital music suppliers to pay a decreased music royalty price if the subscription is bundled with different official 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 customers,” the letter states.
Final 12 months, 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 should manually choose out of the plan.
This alteration has reportedly brought about publishers to lose $230 million within the first 12 months, in response to Danielle Aguirre, govt vp of the Nationwide Music Publishers’ Affiliation.
In an announcement shared with Selection, a Spotify spokesperson famous that customers had been notified a month prematurely in regards to the value improve and the platform gives “simple cancellations in addition to a number of plans for customers to contemplate.”
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