Dear Member,

We are writing to update you on the legal action The MLC brought against Spotify USA Inc. (“Spotify”) regarding Spotify’s royalty payments under the compulsory blanket license (the “Blanket License”) that The MLC administers.

As you may recall, beginning in March 2024, Spotify asserted that its Premium Individual, Duo, and Family subscription streaming plans are now Bundled Subscription Offerings because those plans include access to audiobooks. Applying the rate formula applicable to Bundled Subscription Offerings resulted in a reduction of the Service Provider Revenue that Spotify reports, which resulted in an underpayment of royalties.

In May 2024, The MLC brought an action in the U.S. District Court for the Southern District of New York to address these unprecedented steps taken by Spotify. Congress authorized The MLC to take legal action in situations like this, to enforce the payment obligations of digital services under the Blanket License.

Yesterday, January 29, 2025, the court granted Spotify’s motion to dismiss the case. A copy of the ruling can be found here.

We continue to be concerned that Spotify’s actions are not consistent with the law, and that today’s decision does not align with the facts and legal principles central to this action. We are reviewing the decision and evaluating all available options, including our right to appeal.

We will continue to keep you informed as we explore our next steps. As always, if you have any questions, please contact our Support Team.