Two US senators have called on the US Federal Trade Commission to investigate Spotify over allegations that its streaming “bundling” practice harms consumers and could “damage” the marketplace and the music royalty system.
In May last year, the Mechanical Licensing Collective (MLC) sued Spotify for allegedly underpaying royalties to songwriters and publishers after reclassifying its Premium Individual, Duo, and Family subscription streaming plans as Bundled Subscription Offerings because those plans now offer access to audiobooks.
The lawsuit was dismissed in January, and the MLC asked the court in February to reconsider the dismissal.
On Friday (June 20), Senators Marsha Blackburn, a Tennessee Republican, and Ben Ray Luján, a New Mexico Democrat, sent a letter to Federal Trade Commission Chairman Andrew Ferguson, requesting an investigation into Spotify’s bundling practice.
They wrote: “We have serious concerns about Spotify’s recent move to convert all of its premium music subscribers into different—and ultimately higher-priced — bundled subscriptions without their knowledge or consent.”
“These actions harm consumers and could deeply damage the marketplace and the music royalty system. We urge the FTC to investigate the impact of Spotify’s recent actions.”
Marsha Blackburn and Ben Ray Luján, US Senators
The letter added: “These actions harm consumers and could deeply damage the marketplace and the music royalty system. We urge the FTC to investigate the impact of Spotify’s recent actions, to take steps to protect Americans from being forced into subscriptions without notice or choice, and to safeguard the music marketplace.”
The senators allege Spotify “exploited” federal copyright regulations by automatically converting Premium subscribers into bundled plans that include audiobooks without consumers’ consent or notice. This allowed the platform to pay a lower music royalty rate, they wrote.
“Spotify’s intent seems clear—to slash the statutory royalties it pays to songwriters and music publishers. Not only has this harmed our creative community, but this action has also harmed consumers.”
“Spotify’s intent seems clear — to slash the statutory royalties it pays to songwriters and music publishers. Not only has this harmed our creative community, but this action has also harmed consumers.”
Marsha Blackburn and Ben Ray Luján, US Senators
Earlier this month, the National Music Publishers’ Associationsaid Spotify‘s decision to reclassify its premium music service as a bundled offering, has, “by Spotify’s own numbers” resulted in a $230 million loss for publishers during its first year of implementation.
The NMPA projects that music publishers will “lose over $3.1 billion” through 2032 due to Spotify‘s bundling practice.
The senators allege that Spotify’s audiobooks service “is set at an artificially high price for the purpose of gaming federal regulations and deeply cutting music royalty payments.”
Spotify’s standalone Audiobook Access plan costs $9.99 monthly for 15 hours of listening from a catalog of 200,000 titles, while its music-only Basic Plan provides unlimited access to over 100 million songs for just $10.99.
The senators wrote: “Under the regulations, the higher the Audiobooks Access plan is priced, the lower the music royalty Spotify must pay. Additionally, Spotify’s licenses for audiobooks are consumption-based, so Spotify has little downside if the Audiobooks Access plan is overpriced.
Their letter added that, following “pushback” last year, Spotify “quietly re-launched” a music-only subscription option called the Basic Plan. However, Senators Blackburn and Luján said this tier is only available to certain existing subscribers, not new subscribers.
“[Spotify’s] approach to expanding its offering and raising prices is industry standard. We notify users a month in advance of any price increases and offer easy cancellations as well as multiple plans for users to consider.”
Spotify representative
They wrote: “Spotify has hidden the Basic Plan so that existing subscribers must jump through endless hoops to find the option. As of January 2025, only a handful of Spotify’s millions of Premium Plan subscribers switched back to a music-only ‘Basic’ plan.”
A Spotify representative issued a response via Variety on Friday, saying the company’s “approach to expanding its offering and raising prices is industry standard” and that it “notif[ies] users a month in advance of any price increases and offer easy cancellations as well as multiple plans for users to consider” as part of an effort to “provide consumers incredible value and a best-in-class experience”.
The senators’ intervention represents the latest bipartisan action over Spotify’s bundling practice. Last year, Blackburn was joined by Democrat Congressmen Ted Lieu and Adam Schiff in writing a letter addressed to Shira Perlmutter, the US Register of Copyrights, raising questions about whether Spotify’s move is in line with the spirit of the Music Modernization Act (MMA) of 2018.
“Few would expect customers to purchase audiobooks at that rate when it is available for free with the music service for only $1 more per month. This was, however, the same moment in which Spotify automatically reclassified the 50 million subscribers in its music services into a bundle,” they wrote at the time.
At the NMPA’s 2025 Annual Meeting, the organization’s Executive Vice President and General Counsel Danielle Aguirrehighlighted how the streaming giant’s bundled offering has, “by Spotify’s own numbers” resulted in a $230 million loss for publishers in its first year.
“We are extremely pleased that United States senators Blackburn and Lujan are also asking the FTC to investigate this as it will have ripple effects across other platforms.”
Aguirre said: “These losses will continue if we can’t reverse or correct Spotify’s actions. In fact, if we don’t stop them, we are projected to lose over $3.1 billion through the next CRB period,” which will be Phonorecords V, which determines mechanical royalty rates for 2028 through 2032.
NMPA President and CEO David Israelite issued a statementon Friday, saying: “As we have said since they started their bundling scheme last year – Spotify’s forced conversion of subscribers doesn’t only hurt songwriters – it hurts consumers.
“We are extremely pleased that United States senators Blackburn and Lujan are also asking the FTC to investigate this as it will have ripple effects across other platforms. These unfair business practices hurt music creators and users and it must stop.”
Under a 2022 legal settlement called Phonorecords IV, music publishers and music streaming services agreed that ‘bundle’ services in the United States are permitted to pay a lower mechanical royalty rate to publishers and songwriters than standalone music subscription services.
