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This photo illustration shows a woman as she uses the iPhone application of Swedish music streaming service Spotify on March 7, 2013 in Stockholm, Sweden. JONATHAN NACKSTRAND AFP/Getty Images

Spotify Hit With $150 Million Copyright Infringement Lawsuit

Dec 29, 2015

Music streaming service Spotify has been hit with a $150 million lawsuit over copyright infringement, according to documents filed in California federal court.

David Lowery, frontman of the bands Cracker and Camper Van Beethoven, filed the suit on Monday, which alleges that Spotify failed to properly secure and pay for the "mechanical rights" for many of the songs it makes available through its service, according to media reports. Mechanical rights refer to the copyright holder's control over the reproduction of music. Every time a record company makes a CD, tape, or other record format, it has to pay a royalty.

According to the lawsuit, Spotify's streaming of songs to some 75 million users constitutes the reproduction of music, and so the company needs to properly secure and pay for the rights of a large, but unspecified, number of songs.

Lowery applied for class action status, which means that other music artist could eventually join him as plaintiffs. The lawsuit cites statutory damages for copyright infringement ranging from $750 to $30,000 per infringed song, and $150,000 per song for willful infringement, bringing Spotify's potential liability as high as $150 million.

Though music streaming has grown in popularity over the last few years, the music distribution model continues hit speed bumps. Top artists like Taylor Swift and Adele have declined to release their albums via such services, citing disagreements over how artists are compensated when non-paying users listen to their music. Spotify has also come under fire from music labels and other artists in the past over royalty payments.

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