The National Music Publishers Association (NMPA) has filed a complaint with the Federal Trade Commission against Spotify over the streaming giant’s controversial audiobook bundle offering. The premium subscription tier bundle has led to decreased royalties for songwriters, with the trade group calling the strategy “a scheme to increase profits by deceiving consumers and cheating the music royalty system.” NMPA CEO David Israelite revealed the FTC complaint — reviewed by Rolling Stone — during his speech for the trade group’s annual meeting in New York on Wednesday afternoon, over what he called “Spotify’s unfair, deceptive, and fraudulent business practices.
” “Spotify has declared war on songwriters,” Israelite said Wednesday. “Our response shall be all encompassing.” The NMPA’s dispute with Spotify began several months ago, when Spotify added audiobooks to its premium subscription tier offering, which bundles music and books together.
That move carries significant weight in the complex world of music publishing royalties. The rates on a certain type of royalties songwriters get from streams — called mechanical royalties — aren’t determined solely by the rights holders or streaming services, but by the Copyright Royalty Board (CRB), a three-judge panel housed within the Library of Congress. The CRB statute states that bundled offerings could call for lower royalty rates since music is only part of a subscription package.
As such, Spotify purp.