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Spotify facing $150 million lawsuit over unpaid royalties

Last week we reported that Spotify had announced it was working on a better way to handle royalty payments to artists, but perhaps the streaming service should have started on that long ago. The company is now being sued for $150 million in a class-action suit, Billboard reports.

The lawsuit was filed by David Lowery, front man of the bands Camper Van Beethoven and Cracker, who has a long history of advocating for fair pay for artists. The $150 million suit, filed on December 28, claims that Spotify knowingly and unlawfully distributes copyrighted music without obtaining the proper mechanical licenses.

Related: Spotify outlines plans for a new system to ensure that artists are paid properly

Among the songs allegedly distributed illegally are many from Lowery’s former band, Cracker. Almond Grove, Get On Down the Road, King of Bakersfield, and Tonight I Cross the Border are specifically named in the complaint.

According to the complaint, Spotify has publicly admitted that it hasn’t been able to secure licenses for all of the music it streams. As we reported last week, sources say that Spotify has set aside anywhere from $17 to $25 million to pay out to rights holders once the identity of the payee can be confirmed. This could be the public admission that the complaint is referencing.

The suit was filed as class action because it claims the number of members of the proposed class exceeds 100 and can be easily identified in Spotify’s own records. If approved, this would appoint Lowery as the class representative. In addition to the damages claimed, the suit would also require Spotify to refrain from streaming any unlicensed works until proper rights could be obtained.

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Spotify has been working with the National Music Publishers Association (NMPA) “to find the best way to correctly pay the royalties we have set aside to the right publishers and songwriters,” according to a post on the company’s blog last week. The post mentioned that the process would take “significant time and effort,” but now the company might have more incentive to speed up its efforts.