Spotify has addressed a new class-action lawsuit the company is facing, which accuses it of creating a “modern form of payola” through its Discovery Mode. The feature provides an opportunity for artists and labels to boost discoverability on the platform in exchange for accepting reduced royalties. The plaintiffs in the case allege that this works as a “deceptive pay-for-play” program.
In a statement caught by AllHipHop, Spotify denied the allegations. “The allegations in this complaint are nonsense,” the company said. “Not only do they misrepresent what Discovery Mode is and how it works, but they are riddled with misunderstandings and inaccuracies.”
They further explained: “Discovery Mode is a feature artists can use to flag priority tracks for algorithmic consideration in limited contexts: Radio, Autoplay, and certain Mixes. It doesn’t buy plays, it doesn’t affect editorial playlists, and it’s clearly disclosed in the app and on our website.”
“The complaint even gets basic facts wrong. Discovery Mode isn’t used in all algorithmic playlists, or even Discover Weekly or DJ, as it claims,” the company added. “It’s also wrong to suggest Discovery Mode only supports major label artists. In fact, it’s been widely embraced by the independent music community, many of whom have praised the program publicly.”
Spotify Lawsuit
The lawsuit regarding Spotify's Discovery Mode isn't the only legal trouble the company is facing. Another class action lawsuit filed against Spotify, earlier this week, alleges that it turned a "blind eye” to “mass-scale fraudulent streaming.”
In a statement obtained by Complex, the company also denied the allegations in that lawsuit. “We cannot comment on pending litigation. However, Spotify in no way benefits from the industry-wide challenge of artificial streaming. We heavily invest in always-improving, best-in-class systems to combat it and safeguard artist payouts with strong protections like removing fake streams, withholding royalties, and charging penalties," the statement reads.
