Back in November, Spotify was hit by a lawsuit from an independent music company called Sosa Entertainment LLC seeking “over $1bn in damages” from the streaming company.
Amongst other alleged wrongdoings, Sosa’s suit claimed that Spotify has not paid Sosa full royalties associated with over 550 million streams.
The suit also alleged that Spotify “manually blanket-banned” the tracks with which those 550m streams were associated, and then “deliberately and maliciously blacklisted from its platform the Plaintiffs and their founder, Jake Noch, along with each and every single artist, composer, and writer associated with [the parties]”.
Sosa further claimed, that after Spotify removed those tracks, the streaming company issued what the label calls “false statements” to indie rights agency Merlin.
Merlin, alleges the suit, was told by Spotify that “the number of streams by Sosa artists was disproportionately high; and, according to Spotify, this could only be explained by [these] streams somehow being manipulated”.
Merlin, continues the case, then “wrongfully” terminated its relationship with Sosa, before recommending that a number of other streaming platforms – including Deezer, SoundCloud, Google Play, Saavn and Vevo – also remove Sosa’s catalog, due to what Merlin itself was now describing as “fraudulent streaming activity”.
The dispute is now escalating, with Spotify filing a countersuit directing a number of serious claims against Noch and his label Sosa.
In the countersuit, filed in a Florida court on Monday (May 18) and which you can read here, SPOT claims that “Noch directed third parties to create millions of fake Spotify accounts, and deployed these fake accounts to artificially stream his and Sosa’s content up to hundreds of thousands of times daily, and upwards of hundreds of millions of times in total.”
Spotify then claims that its fraud-monitoring team found “unmistakable signs that the streams of Noch and Sosa’s content had been artificially inflated”.
The content in question, adds the claim, was streamed “almost exclusively” using free Spotify accounts, with “irregular spikes in streaming and from abnormal patterns of locations”, signs that Spotify insists are “indicative of artificial and fraudulent stream manipulation”.
The suit adds: “Following discovery of the fraud, Spotify acted to root out the offending content by removing Noch and Sosa’s content and preventing its delivery onto Spotify’s platform.
“Spotify expended considerable time, resources, and manpower to protect its users and safeguard its platform from Noch and Sosa’s deceptive tactics.”
“I greatly look forward to the day we get to go to court, and I hope that all of Spotify’s shareholders will pay close attention to these cases.”
Jake P. Noch
In response to the allegations, Sosa founder Jake Noch has told MBW that “Spotify’s claims are laughable and blatantly false”.
He added: “Furthermore, if, as they allege, someone who has ADHD, dyslexia, dysgraphia, and dyscalculia and was 16 at the time could jeopardize their business operations, Then I hope that every one of their shareholders has a very diversified portfolio.
“A company such as Spotify that is built on the theft of intellectual property puts every single one of its shareholders at risk, and I foresee Spotify becoming the next Enron.
“I also greatly look forward to the day we get to go to court, and I hope that all of Spotify’s shareholders will pay close attention to these cases.
“These cases will show them that Spotify is just a house of cards and that a small breeze will cause the house to collapse
“This is clearly evidenced by Spotify pouring so many resources into a smear campaign against someone who is only 21. Time will prove that we are right. Until then, I remain confident and joyful, knowing that Spotify will be the next Enron.”
Meanwhile, in March, Pro Music Rights LLC (PMR) filed an antitrust lawsuit against what it says is “the entire music industry”, suggesting that the defendants “have entered into an illegal agreement, combination and/or conspiracy to shut PMR out of the market and to fix prices at infracompetitive levels”.
Named in the suit are Apple, Amazon, Google, Youtube, Spotify, Digital Media Association, National Religious Broadcasters Music License Committee, Radio Music License Committee, Inc., The National Association Of American Wineries, Television Music License Committee, Llc, 7digital, Deezer, iHeartmedia, Connoisseur Media, Pandora, Rhapsody International and SoundCloud.
PMR added that Apple, Spotify et al “have choreographed a refusal, and continuous refusal”, to work with the company.
That suit followed a bundle of 10 copyright lawsuits filed in December 2019 by PMR, against music streaming services, in the U.S. District Court for the Southern District of New York.
PMR claims to have a 7.4% market share based on musical works, with the rights to license about 2 million works from artists including A$AP Rocky, Wiz Khalifa, Pharrell, Young Jeezy, Juelz Santana, Lil Yachty, Soulja Boy, Nipsey Hussle, 2 Chainz, Migos, Gucci Mane and Fall Out Boy, among others.Music Business Worldwide
