In December of 2015 and January 2016 Spotify was hit with back to back lawsuits concerning unpaid royalties to two artists. David Lowery and Melissa Ferrick both filed similar law suits on the company after they felt they weren’t being paid. Lowery sought for $150 million, Ferrick wanted $200 million for her losses. With a $350 million dollar law suit at their feet Spotify felt as if they needed to fire back. Spotify argued that in some cases “the data necessary to confirm the appropriate rights holders is often missing, wrong, or incomplete. When rights holders are not immediately clear, we set aside the royalties we owe until we are able to confirm their identities. We are working closely with the National Music Publishers Association [NMPA] to find the best way to correctly pay the royalties we have set aside and we are investing in the resources and technical expertise to build a comprehensive publishing administration system to solve this problem for good.”
Shortly after the suits were filed and Spotify made their defense statements a $30 million dollar deal was made with the NMPA to pay the royalties that were “set aside” for rights holders issues.
Written by: Graham Garner