The Mechanical Licensing Collective (MLC) has filed a lawsuit against Spotify over unpaid royalties, primarily focusing on the company's controversial bundling practices.

The dispute centers on Spotify's March 2024 decision to classify its Premium Individual, Duo, and Family subscription plans as bundled offerings by including audiobook access. This classification reduces the service provider revenue that Spotify reports, resulting in lower royalty payments.

Key points of the lawsuit:

• Filed in the United States District Court for the Southern District of New York
• Seeks recovery of unpaid royalties under the compulsory mechanical blanket license
• MLC claims Spotify's bundled plans don't comply with applicable laws and regulations
• Demands corrected usage reporting and unpaid royalties from March 2024 onwards

MLC CEO Kris Ahrend emphasizes the organization's statutory authority to enforce royalty payment obligations and ensure proper compensation for songwriters and publishers. Since January 2021, the MLC has distributed over $2 billion in royalties at no cost to creators.

The case number is 1:24-cv-03809, and Spotify is expected to contest the complaint.

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