A lawsuit filed in federal court against the music streaming service Spotify is seeking at least $150 million in royalties for musicians and copyright owners.
The suit, filed Monday by guitarist and vocalist David Lowery of alternative rock band Cracker, alleges Spotify "knowingly, willingly, and unlawfully reproduces and distributes copyrighted" music without a license to do so, Lowery's law firm Michelman & Robinson said.
Violating federal copyright law could mean fines of between $750 and $150,000 for each infringement. That could mean big payouts if the court sides with Lowery, who filed the case on behalf of himself and "all similarly situated artists."
The complaint, filed in the U.S. District Court of Central California, claims the distributing rightsholders of some songs on Spotify have not been compensated by the company.
Spotify said in a statement on Tuesday that it plans to pay "every penny" it owes to songwriters and publishers, but "unfortunately, especially in the United States, the data necessary to confirm the appropriate rightsholders is often missing, wrong, or incomplete."
"When rightsholders are not immediately clear, we set aside the royalties we owe until we are able to confirm their identities," the company added.
Lawyer Sanford Michelman, who's representing Lowery in court, said that putting money aside to pay out royalties later is a clear indication Spotify knowingly violated copyright law. He said those have to be paid via contracts hashed out before copyrighted work is used.
"It's like saying, 'We know we've taken these people's work, we've never made an attempt to find them, but we know we're playing something without the proper license," he said.
Mega-stars like Taylor Swift and Adele are among the artists who have kept some music off Spotify. Some have criticized streaming services for cutting into industry profits by weakening album sales and offering small royalty payments.
But Michelman said the plaintiffs in this case were never contacted by the streaming service for a contract, and therefore have not received any royalties at all. He said it's just like "stealing a car" off the lot.
A court ruled in October that Pandora (P), another online streaming service, had to pay out $90 million to the copyright owners of some oldies songs.
Spotify's website says Spotify has more than 30 million songs available, and it's paid $3 billion to copyright holders.
