Spotify hit with $1.6 billion copyright lawsuit

Spotify has been sued for allegedly playing thousands of songs from the likes of Tom Petty, Neil Young and The Doors without permission.

Wixen Music Publishing, a song licensee, sued Spotify last week in California federal court, alleging the music-streaming startup is using its songs without the proper license or compensation to the music publisher. The lawsuit seeks $1.6 billion in damages.

"Prior to launch, Spotify struck deals with major record labels to obtain the necessary rights to the sound recording copyrights in the songs by offering the major labels, in many cases, equity stake in Spotify," Wixen said in its lawsuit. "But Spotify failed to properly obtain the equivalent rights for the compositions.

"As a result, Spotify has built a billion dollar business on the backs of songwriters and publishers whose music Spotify is using, in many cases without obtaining and paying for the necessary licenses," Wixen said.

The lawsuit comes after the Sweden-based music-streaming service agreed in May to pay more than $43 million to settle a proposed class-action lawsuit brought against it by songwriters who accused the company of not licensing or paying them for use of their music.

Spotify, which has more than 60 million paying users, is expected to go public this year, with a valuation of about $20 billion, according to investment bank GP Bullhound, an early investor in Spotify.

Spotify declined to comment.

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