Back in early August, Spotify settled a major class action lawsuit to the tune of $43.5 million. The lawsuit was filed by Melissa Ferrick and David Lowery on behalf of songwriters and publishers everywhere alleging that the music streaming site had made thousands of songs available to stream without the proper license.
On Friday, the final hearing was held and unfortunately for Spotify who pushed for final approval of the settlement amount, two other rightsholders filed objections that the damages for each composition streamed was insufficient. Under current settlement terms, the writers of compositions that have been streamed between zero and 100 times would receive a minimum payment, while the rest of the money would be divided on a pro rata basis.
Another complication involving the company’s lawsuit is the simple fact that nobody seems to know just how many copyrights Spotify had infringed, which in turn make estimating payout for each rightsholder extremely difficult. Andrew Pincus on the Spotify defense team suggested a “ballpark” estimate of approximately 300,000 which would come out to approximately $100 for each rightsholder even though the actual numbers are sure to vary.
The two opposing rightsholders argue that the settlement amount is far too low. Especially when you realize that statutory damages for willful copyright infringement ranges anywhere from $750 to $150,000.
In any case, presiding judge Alison J. Nathan announced that she would need further time to deliberate. With Spotify set to launch an IPO fairly shortly this lawsuit remains a potential roadblock to accomplishing that goal.