Two US senators have asked the US Federal Trade Commission (FTC) to investigate Spotify’s actions, which may have led to user fraud and underpayment of royalties to music authors.
Two US senators have asked the US Federal Trade Commission (FTC) to investigate Spotify’s actions, which may have led to user fraud and underpayment of royalties to music authors.
According to TechCrunch, in a letter to the FTC, Republican Senator Marsha Blackburn and Democratic Senator Ben Ray Luhan said that Spotify automatically switched users from its standard plan to a more expensive one that included audiobooks, without the customers’ express consent. This move, they said, allowed the company to reduce royalties to authors, since the US provides lower royalties for bundled subscriptions.
«Spotify’s goal seems obvious. To reduce statutory royalties for songwriters and music publishers. This has harmed both creators and consumers,» the petition states.
In March 2024, Spotify updated its Premium subscription model, adding 15 hours of audiobook access and raising the price to $12 per month for an individual plan and $20 for a family plan. At the same time, users had to opt out of the new terms themselves if they did not want to upgrade to the add-on plan.
According to Danielle Aguirre, executive vice president of the National Association of Music Publishers, the rate changes caused financial losses of about $230 million in the first year alone.
Spotify, in a comment to Variety, said that it notified users of the price increase a month before the changes, and also provided a simple cancellation procedure and offered alternative pricing plans.
The platform is one of the largest in the world, which is actively promoting the audiobook segment, seeking to expand its presence in the market. Despite this, the company has come under criticism for this not the first time. In 2023, it was accused of underpaying authors, but the court then closed the case. Now the situation with the new tariffs may lead to a federal investigation.
Recall that we previously published an article about how Spotify will no longer allow developers creating third-party applications using its API to access several features of the platform, such as song and artist recommendations.
