Two U.S. senators are urging the Federal Trade Commission (FTC) to investigate Spotify over claims that the company bundled its music streaming and audiobook services into a more costly subscription without user consent. This move allegedly reduced royalty payments to creators as well.
Senators Marsha Blackburn and Ben Ray Luján have expressed concern that Spotify transformed standard premium subscriptions into pricier bundled packages without notifying consumers. They pointed out that U.S. regulations allow digital music providers to pay lower royalties if subscriptions are bundled with other legitimate services.
The senators’ letter suggests that Spotify aimed to cut the statutory royalties paid to songwriters and music publishers, negatively impacting both the creative community and consumers.
The Mechanical Licensing Collective (MLC) previously sued Spotify, alleging underpayment to songwriters and publishers, but this lawsuit was dismissed earlier this year.
In March 2024, Spotify revamped its Premium tiers, incorporating 15 hours of audiobooks and raising the price to $12 for individuals and $20 for families. Users need to manually opt out of this plan.
According to Danielle Aguirre, executive vice president of the National Music Publishers’ Association, this change has reportedly resulted in publishers losing $230 million in the first year.
A Spotify spokesperson responded, stating that users were informed a month before the price increase and emphasizing that the platform offers easy cancellations and multiple plans for consideration.
