The music streaming powerhouse faces a lawsuit that was valued at $1.6 billion for allegedly violating copyright laws. The lawsuit was filed by the Wixen Music Publishing Inc last week. Spotify was allegedly streaming thousands of songs, such as those of Neil Young, Tom Petty and the band The Doors, which were not licensed and do not give due compensation to the music publisher.
Wixen Music Publishing Inc is an exclusive licensee of songs from over two hundred artists including the aforementioned above. The Beach Boys, Janis Joplin, and Missy Elliot are also included in their roster of licensed artists.
Last Friday, the lawsuit was filed in the state of California in a federal court. Wixen is basically arguing that the music streaming giant is not doing enough work in identifying the rights holders of songs it aims to licenses from record labels.
According to the lawsuit, Spotify was unsuccessful in acquiring a direct or a compulsory license from Wixen which would allow Spotify to reproduce and distribute songs.
As stated by Wixen, the licensee company also alleges Spotify of outsourcing its work in a third party licensing and royalty company, the Harry Fox Agency. Which was described as under-equipped to acquire all the essential mechanical licenses.
Spotify refused to issue a comment.
The Sweden-based company concurred in paying over $43 million to settle a class action stating that the company failed to settle royalty fees for some of the songs it streams last May.
Spotify has increased approximately 20 percent in value, reaching roughly $19 billion in the past few months. This year, the music streaming giant is planning a stock market listing.