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The case against Spotify is a copyright royalty dispute—not a lawsuit by subscribers claiming Spotify deceived them. The Mechanical Licensing Collective (MLC), a music licensing administrator, alleged that Spotify’s treatment of audiobook access as part of a bundled subscription reduced the revenue attributed to music when calculating mechanical royalties. A court rejected MLC’s original theory about Premium, then allowed it to add different claims. The court’s September 1, 2026 order did not decide whether those amended claims are true.
Who brought the case, and what is it about?
The plaintiff is the Mechanical Licensing Collective, or MLC, not a group of Spotify subscribers. The MLC filed suit on May 16, 2024, alleging violations of section 115 of the Copyright Act and its regulations. The dispute concerns how Spotify reports subscription revenue for purposes of calculating mechanical royalties—payments associated with the reproduction and distribution of musical compositions.
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The MLC alleged that Spotify’s bundle reporting assigned a smaller share of subscription revenue to music, lowering the amount used in those royalty calculations. That is an allegation, not a finding that Spotify underpaid royalties or misled customers. The case does not decide whether Spotify’s descriptions of audiobook hours, prices, or Premium features confused subscribers.
How did audiobooks become part of the royalty dispute?
According to the complaint and the court’s review of the pleadings, Spotify added up to 15 hours of audiobook listening per month to Premium in November 2023. Spotify later launched a separate plan called Audiobooks Access on March 1, 2024. The MLC argued that Premium should not have been treated as a newly bundled subscription when that separate plan launched, because audiobook listening was already included in Premium.
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The disagreement turned on how the rules define a bundle for royalty purposes. The relevant regulation, as described by the court, covers a subscription music-streaming service combined with one or more products or services that have “more than token value.” The MLC challenged Spotify’s application of the bundle treatment and its effect on the music-attributed share of revenue.
What has the court decided?
| Date | Event | What it means |
|---|---|---|
| May 16, 2024 | The MLC filed its complaint. | The original claim challenged Spotify’s treatment of Premium as a bundle after Audiobooks Access launched. |
| January 2025 | The district court dismissed the original complaint. | The court held that Premium qualified as a bundle under the regulation because it combined music streaming with audiobook listening that had more than token value. It said the regulation was unambiguous and that its application supported Spotify’s position on the original claim. |
| March 2025 | The court denied reconsideration of its merits ruling but vacated the judgment to let the MLC seek permission to bring new theories. | This opened a route to plead different claims; it did not reverse the ruling on the original theory. |
| September 2025 | The court granted leave to amend. | The MLC could pursue additional theories involving Audiobooks Access and Spotify’s Premium royalty calculations. Permission to plead claims is not proof that they are valid. |
| September 1, 2026 | The court denied the MLC’s request for an interlocutory appeal and struck Spotify’s unclean-hands defense. | The order did not decide the merits of the amended royalty claims. |
In its September 1, 2026 order, U.S. District Judge Analisa Torres wrote: “The Court adheres to its opinion that the plain text of § 385.2 leaves no ambiguity as to whether Premium combines ‘one or more products or services’ having ‘more than token value’ with a subscription music streaming service.” That statement explains the court’s view of the regulation and its ruling on the original Premium-bundling theory. It does not establish that the amended claims are true.
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Does this mean Spotify deceived subscribers?
No such finding follows from these rulings. The plaintiff’s claims concern copyright law and royalty reporting, not a consumer-protection action over what Spotify told subscribers. The court’s decision on the original complaint addressed whether Premium met the regulatory definition of a bundle; it was not a ruling that Spotify deceived users. Nor does the court’s later permission to amend amount to a decision against Spotify on the new theories.
What changed for U.S. audiobook listeners?
Spotify said that, after an app update approved in May 2025, U.S. users could view audiobook prices, buy individual audiobooks, and purchase additional “Top Up” hours beyond the 15 monthly hours included with Premium. That is a company announcement about the U.S. context, not a guarantee that every feature or plan term is available to every listener today. Audiobook features and subscription terms may vary by market and change over time.
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What remains unresolved?
The court orders described above leave the amended royalty claims undecided. They also do not establish how much, if anything, Spotify owes the MLC under those claims. The September 1, 2026 order settled two procedural points—the MLC could not take an interlocutory appeal of the original dismissal, and Spotify’s unclean-hands defense was struck—but was not a final decision on the amended case.
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