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Sweden’s Spotify hit by huge copyright battle

Swedish streaming site Spotify is in hot water after a US-based artist filed a $150 million lawsuit alleging that it has knowingly reproduced copyrighted songs.

Sweden's Spotify hit by huge copyright battle
The band Camper Van Beethoven which is involved in the battle. Photo: Camper Van Beethoven

David Lowery, best known for leading alternative rock bands Cracker and
Camper Van Beethoven, has asked a US judge to allow a class action suit on behalf
of “hundreds of thousands” of potential plaintiffs he believes were affected.

The lawsuit, filed this week in a federal court in Los Angeles, accuses the streaming giant of disregard on so-called mechanical rights — which, unlike performance rights that cover the playing of a recording, pertain to permission to reproduce copyrighted material.

Lowery, who holds a degree in mathematics and is a lecturer at the University of Georgia, accused Spotify of copying and distributing compositions for its online service without permission or informing the copyright holders.

Lowery himself listed four tracks from Camper Van Beethoven or Cracker that he said were taken without his permission for Spotify's more than 75 million users.

The lawsuit also alleged unfair business practices by the Swedish-founded company, saying that its payment structure was arbitrary and “depresses the value of royalties” overall.

“Unless the court enjoins and restrains Spotify's conduct, plaintiff and the class members will continue to endure great and irreparable harm that cannot be fully compensated or measured in monetary value alone,” the lawsuit said.

While not specific about the request for compensation, the lawsuit charged that Spotify has been “unjustly enriched” by at least $150 million.

As evidence, the lawsuit took aim at what it said was a fund by Spotify of millions of dollars to settle royalty claims.

“The existence of this fund reflects Spotify's practice and pattern of copyright infringement, wherein Spotify reproduces and/or distributes the works without first obtaining appropriate authorization or license,” it said.

But Spotify also alluded to the fund in a response to the lawsuit, characterizing it instead as a sign of goodwill.

“We are committed to paying songwriters and publishers every penny. Unfortunately, especially in the United States, the data necessary to confirm the appropriate rights-holders is often missing, wrong or incomplete,” Spotify spokesman Jonathan Prince said in a statement Tuesday.

Spotify said that it had been setting aside royalty money for future payouts when it could not confirm the identities of rights-holders.

The company said it was working in the United States with the National Music Publishers Association to find technical ways “to solve this problem for good.”

Spotify has frequently defended itself against charges from artists — notably Taylor Swift — that it pays back too little.

Spotify's founder Daniel Ek said in June that the site has paid out more than $3 billion in royalties as the company argued that streaming was a rare point of growth in a long stagnant music industry.

The company has long argued that, despite the criticism, it plays by the rules on licensing as it has worked out deals with record companies and songwriters' rights groups.

SPORT

Is football next for Spotify’s billionaire CEO? 

The owner of Spotify, Daniel Ek, has offered to buy Premier League club Arsenal amid supporter backlash against their unpopular American owner, Stan Kroenke.

Arsenal play to an empty stadium
Spotify's owner has set his sights on Arsenal. Photo: Adrian Dennis/AFP

Spotify’s billionaire CEO, Daniel Ek, who revolutionised on-demand music listening for millions of people now hopes to bring his business acumen to “the beautiful game”.

The 38-year-old, known for his no-nonsense attitude, has offered to buy Premier League club Arsenal amid supporter backlash against unpopular American owner Stan Kroenke.

Ek co-founded Spotify with Martin Lorentzon in 2006, and the company which made its debut on the New York Stock Exchange in 2018 now has a market capitalisation of $56 billion.

The Swedish billionaire 

Bald, bearded and usually seen in sneakers, T-shirt and a blazer, Ek is known for his reserved style and pragmatism. He’s a shy problem-solver with a creative streak who takes long walks to think things through and prizes collective teamwork over the individual.

Ek got into computer programming as a young child, and was a dollar millionaire by the age of 23 when he sold his online advertising company, Advertigo, in 2006 for a reported $1.25 million.

“But he’s more of a businessman than a tech nerd,” Sven Carlsson, co-author of “The Spotify Play”, told AFP, painting him as a visionary.

“He’s always thinking six months ahead. He’s not into the details. He’s known for having ambitious, lofty goals, with no understanding for how unrealistic they are,” he said.

“He thinks big, and he has patience” to see those projects through to fruition.

Ek was raised in Stockholm’s working-class suburb of Rågsved. His father left the family when Daniel was young.

“He’s always had something to prove… Being left by his dad was a formative experience,” Carlsson said.

Pelle Snickars, co-author of “The Swedish Unicorn: the Story About Spotify”, describes Ek as “quite Swedish in terms of values”.

“We don’t see him on magazine covers alongside celebrities, he’s not hierarchical and does not hesitate to showcase his collaborators,” Snickars told AFP.

With around 9 percent of Spotify’s capital and 37 percent of voting rights, Forbes put Ek’s fortune at an estimated $4.8 billion in April 2021.

“Innovations are never entirely new”

In 2006, Ek and Lorentzon came up with the idea of creating a platform to distribute music online legally, a practice that was dominated by illegal file sharing sites at the time.

The duo experimented with sharing MP3 music files between the hard drives on their computers. In October 2008 Spotify was finally ready to go live after Ek pleaded with music labels to open their catalogues.

“Innovations are never entirely new,” Ek told the Royal Institute of Technology (KTH) in Stockholm during a 2013 visit.

“The success comes from combining things that already exist and trying to solve a problem that one is really involved in,” he added.

Ek reportedly dropped out of the university’s engineering programme to pursue an IT career – though his enrolment at the school has never been proven, Carlsson noted.

He said Ek’s former colleagues nicknamed him “Spice.”

“They thought he always spiced up his stories a little to make them more interesting,” Carlsson said, adding that it wasn’t necessarily a bad thing.

“Storytelling is something Spotify and Daniel Ek have always been good at.”

Football next? 

Ek’s perseverance may have led to the remarkable rise of the start-up, but artists have over the years complained of it paying them too little and cannibalising sales from their albums.

Ek has repeatedly argued that streaming is a better alternative for artists and that “piracy doesn’t pay (them) a penny – nothing, zilch, zero.”

Snickars and co-author Rasmus Fleischer dispute the idea that Spotify was founded to end piracy and force consumers to pay for music.

They claim that neither Ek nor Lorentzon “had any experience with working professionally with music”, but they had a common background from digital advertising.

“They weren’t particularly interested in music…they could have worked on skin products instead,” Snickars told AFP.

Now, Ek is ready to dive into the football arena.

“As a kid growing up, I’ve cheered for Arsenal as long as I can remember. If KSE [Kroenke Sports Enterprises] would like to sell Arsenal I’d be happy to throw my hat in the ring,” Ek wrote on Twitter on April 23.

Kroenke has however insisted Arsenal is not for sale, despite growing supporter unrest at the American billionaire’s ownership of the club, whose last Premier League title came in 2003/04.

Article by AFP’s Pia Ohlin.

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