Tidal faces legal jeopardy over fake stream numbers accusation

Jay-Z Tidal 4:44

Accusations that Tidal faked millions of music streams continue to dog the company. As of Monday, January 14, Norwegian prosecutors say they have begun an investigation into the May 2018 claims of Norwegian newspaper, Dagens Naeringsliv (DN), that Tidal had manipulated listener data for two of its biggest artists: Kanye West and Beyoncé.

Despite the fact that Tidal has repeatedly denied the fraud accusations, and has questioned the motivation of DN, Norway’s National Authority for Investigation and Prosecution of Economic and Environmental Crime (Okokrim) has begun the process of determining if there is any validity to the claims. While DN’s reporting might not have been enough to prompt an investigation on its own, the story became the impetus behind the filing of an official police complaint against Tidal by Norwegian collection society Tono, which represents around 30,000 songwriters, according to Music Business Worldwide.

If there is any truth to the allegations, it could mean serious trouble for the four-year-old streaming business that is owned by Beyoncé’s husband, Jay-Z. In 2017, Jay-Z’s holding company sold a 33 percent stake in Tidal to Sprint.

In response to this development, Tidal has released the following statement:

“Tidal is not a suspect in the investigation. We are communicating with Økokrim. From the very beginning, DN has quoted documents that they have not shared with us in spite of repeated requests. DN has repeatedly made claims based on information we believe may be falsified. We are aware that at least one person we suspected of theft has been questioned. We cannot comment further at this time and refer to our previous statement, which still stands.”

At the center of the investigation is an analysis of streaming data that DN created in collaboration with the Norwegian University of Science and Technology, producing a report which claims that more than 320 million false plays had been logged for the two albums on more than 1.7 million user accounts. In March 2016, Tidal claimed that Kanye West’s The Life of Pablo had streamed 250 million times in 10 days. It also claimed that Beyonce’s Lemonade had 306 million plays in just 15 days following its release. The publication further claims that Tidal has also failed to make royalty payments to some major labels since October 2017.

For its part, Tidal responded to the original accusation saying, “this is a smear campaign from a publication that once referred to [Chief Operating Officer Lior Tibon] as an ‘Israeli intelligence officer’ and our owner as a ‘crack dealer,’” Tidal said in a statement. “We expect nothing less from them than this ridiculous story, lies, and falsehoods. The information was stolen and manipulated. And we will fight these claims vigorously.” Tidal followed up by opening its own internal investigation into the data: “We have engaged an independent, third party cyber-security firm to conduct a review of what happened and help us further protect the security and integrity of our data. We are proud of the hard work, devotion to our artist driven mission, and tremendous accomplishments of our over one hundred employees in Norway and fifty more in the United States. We look forward to sharing with them, and all of our partners, the results of the review once completed.”

DN’s full report has still not been made public, but in the end, it may not matter if the numbers can be proven one way or the other. According to Okokrim’s Chief Public Prosecutor, Elisabeth Harbo-Lervik, at least four former Tidal employees have been questioned in connection with the investigation. Crucially, one of these employees was Tidal’s head of business intelligence — responsible for analyzing streaming figures, according to DN.

While it’s possible that there is no merit to DN’s claims, Kanye West’s reason for leaving the subscription service in 2017 was that he was owed $3 million. If true, that would lend credibility to at least one portion of DN’s accusations.

It has hardly been smooth sailing for Tidal since its launch. The streaming service has dealt with numerous leadership changes, issues with accidental subscription renewals and charges, and allegations of unpaid royalties, and more. Still, the service continues to look for new ways to grow, having recently inked a deal with Plex, and now lets its Android users get the full quality of its Masters MQA collection without any additional hardware.

Updated to include Tidal’s statement on the investigation, and it’s original statement on its internal investigation.

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