Two U.S. senators have requested that the Federal Commerce Fee (FTC) examine Spotify resulting from 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 commonplace premium subscriptions into higher-cost bundled subscriptions with out informing customers. In addition they highlighted that current U.S. regulations allow digital music suppliers to pay a lowered 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 artistic group, however this motion has additionally harmed customers,” 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 value to $12 for people and $20 for households. Customers need to manually decide out of the plan.
This variation has reportedly brought on publishers to lose $230 million within the first yr, in accordance with Danielle Aguirre, govt vp of the Nationwide Music Publishers’ Affiliation.
In a press release shared with Variety, a Spotify spokesperson famous that customers have been notified a month prematurely concerning the worth enhance and the platform affords “simple cancellations in addition to a number of plans for customers to think about.”