24 May 2018Copyright

Judge approves $43m Spotify copyright settlement

A US judge has rubber-stamped a settlement agreement, including a $43.45 million cash payment, in a class action lawsuit filed against Spotify for copyright infringement.

Musician David Lowery sued Spotify in December 2015, claiming the streaming service had unlawfully reproduced and distributed songs without obtaining rights owners’ permission. The company was hit with a separate lawsuit by songwriter Melissa Ferrick, before the cases were consolidated.

After the parties agreed on the settlement fee earlier this year, more than 500 musicians and copyright owners objected to the proposed deal, calling it “grossly insufficient”.

On Tuesday, May 22, District Judge Alison Nathan at the US District Court for the Southern District of New York overruled those objections and approved the settlement. She had entered an order of preliminary approval on June 28, 2017.

According to the decision, the class is defined as “all persons or entities who own copyrights in one or more musical compositions (a) for which a certificate of registration has been issued or applied for on or before the preliminary approval date; and (b) that was made available by Spotify for interactive streaming and/or limited downloads during the class period (December 28, 2012 through the preliminary approval date) without a licence”.

Nathan explained that some objectors said the payment by Spotify should be greater.

The settlement agreement included a cash payment of $43.45 million for past streaming, but it also provided a process for class members who had claimed relief to receive ongoing royalties for future streaming.

These would be calculated at the statutory rate and “could, depending on the number of claims submitted and the future performance of Spotify’s service, easily total tens of millions of dollars in future royalties for the class”, the settlement said.

Nathan said the objectors “tend to focus on the value of the immediate payment while largely ignoring the future royalty payment programme and the non-monetary benefits that the settlement provides”, so in light of all the benefits, “the amount of the settlement is not unreasonable”.

Other objectors complained that the settlement notice was “unclear or ambiguous or lacked sufficient information”, the judge added. But she again rejected these claims, saying “ultimately, the court concludes that there is sufficient evidence to evaluate the value of the settlement”.

Nathan concluded that the settlement is fair, reasonable and adequate, and gave it her final approval. In addition, she reduced the class counsel’s attorneys’ fees from the originally-sought $15.86 million to $13 million.

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