Spotify Wins Delay in MLC Royalties Lawsuit, But for How Long?

The Mechanical Licensing Collective (MLC) filed their lawsuit against Spotify two weeks ago, claiming that the streaming giant owes millions in unpaid mechanical royalties due to allegedly taking advantage of copyright loopholes by bundling music with other services. Now, Judge Analisa Torres has granted Spotify’s request to delay responding to the complaint.

Judge Torres signed off on Spotify’s request to push back their response deadline from June 10th to July 19th. According to court documents, Spotify’s lawyers said the extension would provide “sufficient time for the parties to correspond and potentially narrow the issues raised.”

It’s unclear exactly what Spotify plans to do with the extra month, sources indicate they will likely use the delay to build their defense strategy against the MLC’s accusations. In the meantime, the MLC estimates that Spotify owes around $150 million per year in unpaid royalties – which comes out to over $12.5 million each month that passes without an injunction.

Spotify has been steadfast in their position that bundling music with other offerings like audiobooks is perfectly legal. They point to the Phonorecords IV ruling, which the National Music Publishers’ Association says allows changes to “the treatment of ‘bundles’ of products or services that include music.” Since launching their standalone audiobook platform, Spotify has rebranded their main products as bundles to take advantage of the new rules.

The lawsuit could also spark broader disputes across the industry. Earlier this month, Sony Music Publishing hinted at “considering all options” against Spotify as well.