Multiple class action lawsuits have been filed against Spotify, alleging the streaming giant is systematically underpaying independent artists and songwriters despite increased royalty rates mandated by Copyright Royalty Board (CRB) rate agreements. The most prominent case involves rapper RBX, who filed a class action in November 2025 alleging that Spotify allowed fake streams that deprived artists of millions in unpaid royalties. Beyond this, Spotify faces additional litigation from the Mechanical Licensing Collective (MLC) over royalty payments and from artists alleging a “pay-for-play” system that charges for playlist placement—issues that highlight the growing gap between what artists should be earning and what they actually receive.
Table of Contents
- What Class Actions Are Being Filed Against Spotify for Underpaying Artists?
- How Do CRB Rate Agreements Protect Artists, and Is Spotify Complying?
- The 1,000-Stream Threshold: How Spotify’s Policies Directly Harm Independent Artists
- What Legal Options Do Artists Have If They Believe They’re Owed Royalties?
- The Fake Streams Problem and Its Impact on Legitimate Artists
- How Independent Artists Can Protect Themselves Going Forward
- What’s Next for Spotify’s Royalty Disputes?
- Frequently Asked Questions
What Class Actions Are Being Filed Against Spotify for Underpaying Artists?
As of late 2025, multiple class action lawsuits target Spotify’s royalty practices. The most significant is the RBX Class Action, filed November 2, 2025, in U.S. District Court for the Central District of California. Rapper RBX alleged that Spotify knowingly or recklessly allowed fake streams to proliferate on the platform—streams generated by bots or fraudulent accounts that artificially inflate play counts. This artificial inflation, RBX argues, effectively dilutes the royalty pool: when a song with fake streams receives payment from Spotify’s per-stream rate, actual royalties available for legitimate artists decrease because Spotify’s total payout is divided among more “streams.” RBX sought to represent thousands of recording artists, songwriters, and music rights holders.
A separate class action lawsuit reported by the Hollywood Reporter alleges a different form of underpayment: a “pay-for-play” regime. According to this lawsuit, Spotify offers artists and labels the chance to pay for playlist and recommendation placement, with costs ranging from $2,000 for artists with modest followings to $10,000 for access to the largest playlists. This practice, plaintiffs argue, effectively converts Spotify’s platform into a paid advertising network rather than a meritocratic streaming service, disadvantaging independent artists who cannot afford these fees. The Mechanical Licensing Collective (MLC) also sued Spotify, but their lawsuit targets a specific accounting practice: in March 2024, Spotify reclassified Premium subscriptions as “Bundled Subscription Offerings” (BSOs), which lowered the royalty rate songwriters and publishers receive. By bundling Premium with other services or offerings, Spotify reduced the per-stream rate owed to rights holders—a move that directly contradicts the spirit of the CRB’s rate-setting intent.
How Do CRB Rate Agreements Protect Artists, and Is Spotify Complying?
The Copyright Royalty Board (CRB) is a three-judge panel within the Library of Congress that sets mechanical royalty rates for streaming services. In the most recent rate-setting period, known as “Phonorecords IV,” the CRB settled on a 15.1% rate for U.S. streaming revenue going to songwriters and publishers—effective January 1, 2023, and scheduled to increase to 15.35% by 2027. This represents a significant increase: the previous 2018-2022 rate was 10.5%, meaning the new agreement calls for a 44% increase in payments to songwriters and publishers over the five-year period. However, a critical distinction must be made: the CRB sets rates for *songwriters and publishers* (the mechanical license), not for *recording artists* (the sound recording license).
Recording artists—the performers and producers of the actual songs—rely on separate negotiations with Spotify and depend heavily on the deals their labels or distributors negotiate on their behalf. This means that even if Spotify is technically complying with CRB mechanical rates for songwriters, recording artists may receive significantly less. Independent artists without label backing are most vulnerable, as they bear the full impact of Spotify’s internal policies and per-stream rate cuts. Spotify’s reclassification of Premium subscriptions as BSOs directly challenged the CRB framework. By reclassifying the subscription tier, Spotify arguably reduced the effective rate paid to songwriters and publishers below what the CRB intended—a legal gray area that prompted the MLC’s lawsuit. The company has claimed it paid the music industry over $11 billion in 2025, with approximately half generated by independent artists and labels, but these aggregate figures obscure the actual per-stream rates that individual artists receive.
The 1,000-Stream Threshold: How Spotify’s Policies Directly Harm Independent Artists
One of the most directly damaging policies affecting independent artists is Spotify’s 1,000-stream annual threshold. Spotify does not pay royalties on tracks that accumulate fewer than 1,000 streams in a calendar year—effectively cutting off payment for what would otherwise be legitimate musical content. In 2024 alone, this policy caused Spotify to withhold $47 million in royalties that should have gone to independent artists and small creators. A survey of independent artists found that 85% reported revenue reduction—many attributed specifically to this threshold policy. This threshold disproportionately affects bedroom producers, niche artists, and emerging creators who are still building an audience. A new artist might release 20 songs in their first year, each receiving 200-300 streams from supportive listeners and friends.
None of these songs reach the 1,000-stream threshold, so Spotify pays nothing—even though the artist’s listeners are real people using Spotify’s service (and Spotify is generating ad revenue or subscription revenue from those listeners). Meanwhile, Spotify’s cost to distribute and host these songs is negligible. The policy is purely a business decision: by raising the minimum threshold, Spotify reduces its royalty obligations while retaining all songs on the platform for catalog breadth. What makes this policy particularly egregious is that it contradicts the ethos of the CRB’s rate-setting work. The CRB assumes that all streams generate royalties proportional to Spotify’s revenue. But Spotify’s internal policy creates a category of streams that generate *zero* royalties—invisible streams that nevertheless consume platform resources and contribute to Spotify’s service value. For independent artists, this threshold can mean the difference between earning $20 from royalties and earning $0.
What Legal Options Do Artists Have If They Believe They’re Owed Royalties?
If you are an independent artist, songwriter, or music rights holder who believes you have been underpaid by Spotify, you have several potential paths forward. First, you can monitor the ongoing class action lawsuits—if you are a member of the class (a recording artist, songwriter, or music rights holder who had content on Spotify during the relevant time period), you may be eligible to join and potentially receive a settlement payout if the lawsuits succeed. Class action settlements are typically distributed based on the number of streams or royalties involved, so artists who had high streaming numbers would receive larger shares. Second, you can seek individual representation. If you have documentation of specific underpaytments—such as a discrepancy between what Spotify claimed to pay and what you actually received—you can consult an attorney who specializes in music law.
This option is most practical if you are owed a substantial sum (generally $10,000 or more), as individual litigation is expensive. Some music law firms work on contingency, meaning they take a percentage of any settlement or judgment rather than charging upfront fees. A caveat: joining a class action lawsuit does not prevent you from negotiating directly with Spotify or settling privately. However, once a class action settlement is approved by a court, you are generally bound by it if you do not opt out before the deadline. Class action settlements typically provide modest per-artist payouts (often $50-$500 depending on streaming volume), so you may want to consult an attorney to determine whether your individual claim would be worth more outside the class.
The Fake Streams Problem and Its Impact on Legitimate Artists
The RBX lawsuit highlights another underpayment mechanism: fake streams. Spotify’s platform has struggled for years with artificial streaming—streams generated by bots, click farms, or fraudulent accounts designed to artificially inflate a song’s play count. When a track receives millions of fake streams, it creates a water-down effect: Spotify’s total royalty pool for that month is fixed, so every fake stream means less money per legitimate stream for all other artists. While Spotify has implemented anti-fraud measures and removed billions of fake streams over the years, the company has never fully disclosed the scope of the problem or the impact on artists’ earnings.
This opacity is what the RBX lawsuit seeks to expose and remediate. If Spotify knowingly allowed fake streams to persist without adequately warning artists, or if the company failed to separate fake streams from legitimate ones when calculating payouts, that could constitute fraud—the allegation in RBX’s complaint. However, not all “fake streams” are equally damaging. Some may come from legitimate playlist pitching services, others from bots owned by artists trying to artificially boost their own songs, and others from coordinated fraud rings. The RBX lawsuit treats all non-legitimate streams as a harm to the class, but the appropriate remedy depends on the specific mechanism of fraud, which is why discovery in the case is expected to be extensive.
How Independent Artists Can Protect Themselves Going Forward
Independent artists cannot entirely avoid Spotify’s policies, but they can take steps to minimize the impact. First, understand the 1,000-stream threshold and the fact that you will not be paid on tracks that fall below it. This means that releasing many low-quality or low-promotion songs is financially counterproductive on Spotify specifically (though it may help you on other platforms). Consider focusing your energy on fewer, better-promoted releases that have a higher chance of reaching the threshold.
Second, diversify your income streams beyond Spotify. Licensing your music to YouTube, TikTok, and other platforms provides additional revenue and reduces your dependence on Spotify’s per-stream rate. Direct-to-fan sales through platforms like Bandcamp, where you can set your own price and keep up to 80% of revenue, provide far better financial returns than streaming. Third, keep detailed records of your streams and royalty payments from Spotify. If you notice a discrepancy or a sudden drop in royalties, documentation will be essential if you ever need to dispute the payment or join a legal action.
What’s Next for Spotify’s Royalty Disputes?
The lawsuits against Spotify are expected to proceed through discovery and trial over the next 1-3 years. The RBX class action, filed in late 2025, will likely not reach settlement or trial before 2027 or 2028. The MLC lawsuit, which targets a specific accounting practice with clear contractual language, may move faster.
In the meantime, Spotify continues to operate under CRB-mandated rates, though the company disputes some interpretations of how those rates apply to bundled subscriptions and other service offerings. Whether these lawsuits succeed or fail will likely shape the future of music streaming economics. If courts rule that Spotify underpaid artists, the company could face significant damages and be forced to restructure its rate calculations. For independent artists, the most important outcome would be a court ruling that eliminates the 1,000-stream threshold or requires Spotify to pay on all streams, regardless of annual volume.
Frequently Asked Questions
How much does Spotify pay per stream?
Spotify’s per-stream rate varies by country and subscription type but averages between $0.003 and $0.005 per stream. However, independent artists with fewer than 1,000 annual streams on a track receive $0 per stream due to Spotify’s threshold policy. The rate is divided between record labels, publishers, songwriters, and distributors, so artists rarely see the full per-stream amount.
Can I join the RBX class action lawsuit against Spotify?
If you are a recording artist, songwriter, music publisher, or other rights holder with content on Spotify during the relevant time period, you may be eligible to join. You would not need to take action immediately—class action administrators typically announce settlement periods with deadlines for joining. Monitor the U.S. District Court for the Central District of California for updates on the case or consult a music law attorney.
What is a “pay-for-play” scheme, and is it legal?
According to the Hollywood Reporter class action, Spotify allegedly charges between $2,000 and $10,000 for playlist and recommendation placement. If true, this would convert Spotify from a meritocratic platform into a paid advertising network. Whether it is legal depends on contract terms and whether Spotify disclosed the practice. The lawsuit alleges fraud, suggesting plaintiffs believe Spotify concealed the practice.
If I have fewer than 1,000 streams per year, can I get paid by Spotify?
No. Spotify does not currently pay royalties on tracks with fewer than 1,000 annual streams. This policy withheld $47 million from independent artists in 2024. You can still earn on other platforms (Apple Music, Amazon Music, YouTube, Bandcamp, etc.), but Spotify specifically will not compensate you until you cross the threshold.
How long will the Spotify class action lawsuits take?
Class actions typically take 2-4 years from filing to settlement, and potentially 5+ years if they reach trial. The RBX lawsuit, filed in November 2025, could reach settlement by 2027-2028. The MLC lawsuit may move faster because it targets a specific practice with clearer legal language.
Should I hire a lawyer to sue Spotify individually?
Individual lawsuits are expensive (typically $5,000-$20,000+ in legal fees). They are generally only justified if you are owed a large sum ($10,000+). For smaller claims, joining a class action is the better option. Consult a music law attorney on a free initial consultation to evaluate your specific situation.
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