Global music streaming giant Spotify is under the spotlight in the United States as two senators have urged the Federal Trade Commission (FTC) to investigate the platform over concerns regarding pricing practices and royalty payments.
On June 20, U.S. Senators Marsha Blackburn and Ben Ray Luján formally requested an FTC probe into Spotify’s recent restructuring of its Premium subscription plans. According to the letter, the company allegedly converted standard music-only subscriptions into more expensive bundled packages which now include audiobook access without clearly informing users or obtaining their consent.
The senators argue that this move may have violated consumer protection norms and simultaneously resulted in a reduction in statutory royalty payments to songwriters and publishers.
“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,” the letter read.
In March 2024, Spotify introduced a revised pricing structure:
- Individual Premium plans now cost $12/month
- Family plans were increased to $20/month
The updated tiers include up to 15 hours of audiobook listening, but users were automatically migrated unless they manually opted out a process some found unclear or burdensome.
The National Music Publishers’ Association (NMPA) has voiced concern that these changes have significantly affected revenue for creators. According to Danielle Aguirre, Executive Vice President of the NMPA, publishers are estimated to have lost approximately $230 million in the first year alone due to the bundling model.
Although a previous lawsuit filed by the Mechanical Licensing Collective (MLC) against Spotify for underpayment was dismissed earlier this year, the issue continues to spark debate in the industry.
Spotify has defended its actions, stating that users were notified one month in advance of the price revision and that the platform offers clear cancellation options along with a variety of subscription plans.
In a public statement, a Spotify spokesperson said:
“We provide multiple subscription choices to users, ensure transparency with our pricing updates, and make it easy to cancel at any time.”
What This Means for Indian Users
While this issue is rooted in U.S. regulatory dynamics, it raises important questions for Indian users too particularly around transparency in subscription models, data ethics, and fair compensation for creators.
India’s growing digital streaming market is sensitive to pricing shifts and value additions, and this case underscores the importance of clear communication and ethical bundling practices especially when new content like audiobooks or podcasts are integrated into standard plans.
