Senators urge FTC to investigate Spotify’s higher-priced bundled subscription

A duo of U.S. senators is urging the Federal Trade Commission (FTC) to look into Spotify over claims that the streaming giant has bundled its music and audiobook services into a pricier subscription without user approval. On June 20, Senators Marsha Blackburn and Ben Ray Luján sent a letter to the FTC, accusing Spotify of converting standard premium subscriptions into these higher-priced bundles without adequately informing consumers. The senators pointed out that current U.S. regulations allow digital music platforms to pay lower royalty rates when their subscriptions are bundled with other legitimate services. They expressed concern that Spotify's actions appear aimed at drastically reducing the royalties paid to songwriters and music publishers, which not only impacts the creative community but also negatively affects consumers. This letter comes on the heels of a lawsuit filed last year by the Mechanical Licensing Collective (MLC) against Spotify for allegedly underpaying songwriters and publishers, although the case was dismissed in January. In March 2024, Spotify revamped its Premium offerings, introducing 15 hours of audiobooks and raising individual subscription prices to $12 and family plans to $20. Users are required to manually opt out of this new plan, a change that has reportedly cost publishers an estimated $230 million within the first year, according to Danielle Aguirre, executive vice president of the National Music Publishers’ Association. In response to the senators' letter, a Spotify representative stated that users were given a month’s notice regarding the price increase and emphasized that the platform provides straightforward cancellation options along with various plans for subscribers to choose from.