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Two US senators have referred to as on the US Federal Commerce Fee to research Spotify over allegations that its streaming “bundling” apply harms customers and will “injury” {the marketplace} and the music royalty system.
In Might final yr, the Mechanical Licensing Collective (MLC) sued Spotify for allegedly underpaying royalties to songwriters and publishers after reclassifying its Premium Particular person, Duo, and Household subscription streaming plans as Bundled Subscription Choices as a result of these plans now provide entry to audiobooks.
The lawsuit was dismissed in January, and the MLC requested the court docket in February to rethink the dismissal.
On Friday (June 20), Senators Marsha Blackburn, a Tennessee Republican, and Ben Ray Luján, a New Mexico Democrat, despatched a letter to Federal Commerce Fee Chairman Andrew Ferguson, requesting an investigation into Spotify’s bundling apply.
They wrote: “We’ve critical issues about Spotify’s latest transfer to transform all of its premium music subscribers into totally different—and finally higher-priced — bundled subscriptions with out their data or consent.”
“These actions hurt customers and will deeply injury {the marketplace} and the music royalty system. We urge the FTC to research the affect of Spotify’s latest actions.”
Marsha Blackburn and Ben Ray Luján, US Senators
The letter added: “These actions hurt customers and will deeply injury {the marketplace} and the music royalty system. We urge the FTC to research the affect of Spotify’s latest actions, to take steps to guard People from being compelled into subscriptions with out discover or alternative, and to safeguard the music market.”
The senators allege Spotify “exploited” federal copyright rules by routinely changing Premium subscribers into bundled plans that embrace audiobooks with out customers’ consent or discover. This allowed the platform to pay a decrease music royalty charge, they wrote.
“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.”
“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.”
Marsha Blackburn and Ben Ray Luján, US Senators
Earlier this month, the Nationwide Music Publishers’ Affiliationstated Spotify‘s determination to reclassify its premium music service as a bundled providing, has, “by Spotify’s personal numbers” resulted in a $230 million loss for publishers throughout its first yr of implementation.
The NMPA tasks that music publishers will “lose over $3.1 billion” by means of 2032 resulting from Spotify‘s bundling apply.
The senators allege that Spotify’s audiobooks service “is about at an artificially excessive value for the aim of gaming federal rules and deeply chopping music royalty funds.”
Spotify’s standalone Audiobook Entry plan prices $9.99 month-to-month for 15 hours of listening from a catalog of 200,000 titles, whereas its music-only Fundamental Plan supplies limitless entry to over 100 million songs for simply $10.99.
The senators wrote: “Underneath the rules, the upper the Audiobooks Entry plan is priced, the decrease the music royalty Spotify should pay. Moreover, Spotify’s licenses for audiobooks are consumption-based, so Spotify has little draw back if the Audiobooks Entry plan is overpriced.
Their letter added that, following “pushback” final yr, Spotify “quietly re-launched” a music-only subscription choice referred to as the Fundamental Plan. Nonetheless, Senators Blackburn and Luján stated this tier is simply out there to sure present subscribers, not new subscribers.
“[Spotify’s] method to increasing its providing and elevating costs is trade normal. We notify customers a month upfront of any value will increase and provide simple cancellations in addition to a number of plans for customers to contemplate.”
Spotify consultant
They wrote: “Spotify has hidden the Fundamental Plan in order that present subscribers should leap by means of limitless hoops to seek out the choice. As of January 2025, solely a handful of Spotify’s hundreds of thousands of Premium Plan subscribers switched again to a music-only ‘Fundamental’ plan.”
A Spotify consultant issued a response through Selection on Friday, saying the corporate’s “method to increasing its providing and elevating costs is trade normal” and that it “notif[ies] customers a month upfront of any value will increase and provide simple cancellations in addition to a number of plans for customers to contemplate” as a part of an effort to “present customers unimaginable worth and a best-in-class expertise”.
The senators’ intervention represents the most recent bipartisan motion over Spotify’s bundling apply. Final yr, Blackburn was joined by Democrat Congressmen Ted Lieu and Adam Schiff in writing a letter addressed to Shira Perlmutter, the US Register of Copyrights, elevating questions on whether or not Spotify’s transfer is according to the spirit of the Music Modernization Act (MMA) of 2018.
“Few would count on prospects to buy audiobooks at that charge when it’s out there without cost with the music service for less than $1 extra monthly. This was, nonetheless, the identical second during which Spotify routinely reclassified the 50 million subscribers in its music providers right into a bundle,” they wrote on the time.
At the NMPA’s 2025 Annual Assembly, the group’s Government Vice President and Basic Counsel Danielle Aguirrehighlighted how the streaming large’s bundled providing has, “by Spotify’s personal numbers” resulted in a $230 million loss for publishers in its first yr.
“We’re extraordinarily happy that United States senators Blackburn and Lujan are additionally asking the FTC to research this as it should have ripple results throughout different platforms.”
Aguirre stated: “These losses will proceed if we will’t reverse or right Spotify’s actions. The truth is, if we don’t cease them, we’re projected to lose over $3.1 billion by means of the subsequent CRB interval,” which will probably be Phonorecords V, which determines mechanical royalty charges for 2028 by means of 2032.
NMPA President and CEO David Israelite issued an announcementon Friday, saying: “As we have now stated since they began their bundling scheme final yr – Spotify’s compelled conversion of subscribers doesn’t solely harm songwriters – it hurts customers.
“We’re extraordinarily happy that United States senators Blackburn and Lujan are additionally asking the FTC to research this as it should have ripple results throughout different platforms. These unfair enterprise practices harm music creators and customers and it should cease.”
Underneath a 2022 authorized settlement referred to as Phonorecords IV, music publishers and music streaming providers agreed that ‘bundle’ providers in the US are permitted to pay a decrease mechanical royalty charge to publishers and songwriters than standalone music subscription providers.
