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Spotify Lawsuit Slows Its Tempo: Class Members Disagree With Payout

More than 500 musicians and song owners, with names including Tom Petty, and Dan Auerbach of The Black Keys, have recently objected to a $43 million proposed class settlement in a recent Spotify Lawsuit pertaining to copyright allegations, referring to the initial payout as “grossly insufficient.”

This number of $43 million was brought about when Spotify agreed to end litigation from songwriters who claimed its streaming service continually held up and failed to pay proper royalties to the artists and owners of the music. The objection to the number goes on to state, in part, that Spotify will end up paying very small sums to the artists themselves given the number of copyright owners who are eligible to submit a claim, on top of the already substantial fees in which the attorneys will ultimately take. Though $43 million does not sound like chump change to many of the people reading this right now, when compared to Spotify’s $3 billion reported annual revenue, $43 million acts as a small price to pay, according to the protestors of the agreed upon amount.“As a group, [the objectors] assert that the settlement agreement is substantively unfair because the $43 million settlement fund, of which at least one-third is intended to go not to the class but instead to class counsel as attorneys’ fees … is grossly insufficient both in of Spotify’s ability to withstand a greater judgment and the best possible recovery in this case,” the objection says.

When broken down by the side of the artists, they say the agreement could wind up paying only $3.82 for each composition that was infringed, calling the payout “a free pass.”

The settlement acts as if it proposes to resolve two class actions which claim that the music streaming site chose “systematic and willful copyright infringement,” rather than following proper procedure to pay the mechanical royalties these artists are legally entitled to.

Under the terms of this initial $43 million agreement (yet to, though must be, approved by a judge), Spotify will set up a $43.45 million fund to pay song owners for past uses, as well as procedures to pay ongoing royalties as well, which are said to “easily total tens of millions of dollars” as court papers suggest that the class, in total, could include hundreds of thousands of songwriters.

The artist’s objection, however, goes on to state that, “As a group, [the objectors] assert that the settlement agreement is substantively unfair because the $43 million settlement fund, of which at least one-third is intended to go not to the class but instead to class counsel as attorneys’ fees … is grossly insufficient both in of Spotify’s ability to withstand a greater judgment and the best possible recovery in this case.” The disagreeing side brings together musicians of all levels of fame; from Tom Petty to Tom Morello, and even the estates of deceased artists such as Stevie Ray Vaughn, over 500 settlement class members are showing dissent, forming a class within the class.

Moreover, the settlement, as proposed at the moment, was deemed “procedurally unfair” as it requires class members to provide the copyright registration numbers of compositions that they own in order to exclude themselves from the settlement — and because the language of the agreement prevents musicians from having their publishers or other administrators file claims on their behalf, stating: “Requiring a settlement class member to provide detailed information that it does not have and would have to incur considerable expense to obtain in order to exclude itself from the settlement makes as little sense as barring the settlement class members’ delegate, who is more likely to have the required information, from supplying it on behalf of the settlement class member.”

Since the beginning, Spotify was looked upon under a skeptic’s lens due to the fact that it really seemed too good to be true. To not have to pay for a single track, yet have millions at hand in your pocket was a godsend for many, especially after the major crackdown on pirating in the mid-2000’s.

We’d love to know how you feel about this case and the morality behind it, so don’t hesitate to let us know. We can be reached at ConsiderTheConsumer@gmail.com, or simply in the comments section below.

A legal proceeding like this truly goes beyond the courtroom and almost poses a philosophical dispute. For whom is the art constructed? The Artist or his audience? I can hear my PHIL103 prompting it now.

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