Streaming service Spotify has come under fire this week, as music rights activist and Cracker frontman David Lowrey filed a class action lawsuit against the company on December 28 seeking $150 million in damages. Spotify, he claims, has knowingly reproduced and distributed copyrighted material through their service to 75 million users without ownership of proper mechanical licenses.
The lawsuit alleges that Spotify has publicly admitted its failure to obtain such licenses, using a reserve fund of $17 to $25 million to pay off royalties for the copyrighted music. These actions, the lawsuit states, creates “substantial harm and injury to the copyright holders, and diminishing the integrity of the works.”
Settlement negotiations between Spotify and the National Music Publishers Association continue, regarding Spotify’s alleged allowance for users to access and play unlicensed material.
Spotify global head of communications and public policy Jonathan Prince issued a statement on the matter: 
“Unfortunately, especially in the United States, the data necessary to confirm the appropriate rightsholders is often missing, wrong, or incomplete. When rightsholders are not immediately clear, we set aside the royalties we owe until we are able to confirm their identities. We are working closely with the National Music Publishers Association to find the best way to correctly pay the royalties we have set aside and we are investing in the resources and technical expertise to build a comprehensive publishing administration system to solve this problem for good.”
