Spotify has been sued for $1.6 billion over unpaid license fees

Spotify has been sued by American music publisher Wixen Music for using songs from a number of artists without paying license fees and compensation. Compensation of at least $1.6 billion is being sought.

Wixen Music claims to have exclusive copyrights to the works of certain artists and Spotify has previously publicly admitted that it does not hold the appropriate licenses to disclose and distribute the associated music productions. Wixen Music argues that music makers and their publishers have not shared enough in Spotify’s revenues. The music service allegedly infringed Wixen Music’s copyrights, according to the indictment.

This includes the music of artists such as Neil Young, Rage Against the Machine and Tom Petty. Wixen Music is claiming the maximum legal damages for the copyright infringement of any musical work offered by Spotify, which is $150,000. In total, the damage amount would then amount to at least 1.6 billion dollars. Spotify has not responded to a request for comment from The Hollywood Reporter.

Spotify has had to deal with complaints from artists or publishers more often. For example, the music service decided in May to pay $43 million to songwriters David Lowery and Melissa Ferrick in the context of a class action case. This outcome has yet to be approved by a judge. Wixen Music could also benefit from this, but has protested against this settlement. The publisher believes that the compensation for members of the class action case is too low.

Based on a 2015 report in the WSJ, Wixen Music states that Spotify offers a total of about 30 million different songs, with the music service not having paid royalties in 21 percent of the cases. Thus, 6.3 million songs would be copyright infringement.

In June 2017, Spotify showed a loss of 349 million euros in 2016, compared to 236 million euros in 2015. According to Spotify, the incurred loss was due to significant investments in product development, international expansions and a growth in the number of employees. Spotify’s turnover increased in 2016 from 1.93 billion to 2.93 billion euros. The number of worldwide users also rose to 140 million.