ETHICS IN PRACTICE CASE Copyright Infringement? Spotify, the music streaming company, faces a $150 mil- Lowery's lawyers argues that artists should not have to lion class action lawsuit led by David Lowery, the front- track down royalties owed them but that it is Spotify's man for Cracker, the alternative rock band, and Camper responsibility to secure the license and pay the royalty. Van Beethoven, an American rock band. The musicians Spotify, in its defense, says that the laws and copy- maintain that Spotify has not been securing the proper right infrastructure that currently exist do not fully factor licenses for all of the music it offers and has not been in the scope and speed with which digital music services paying royalties to all of the appropriate parties. The impli- operate. The company maintains that securing advance cation emerging from the lawsuit is that the company that permissions for each track is inefficient and possibly crip- claims to be providing an alternative to online piracy is not pling for a company trying to stay competitive. In January living up to its own legal obligations. In short, it's a case of 2016, Spotify was hit with a second lawsuit over the copyright infringement and some might say it involves alleged and systemic and willful copyright infringement. stealing another person's intellectual property. A license for a piece of music involves two separate copyrights. First is the recording, which is typically owned Questions by the performer's label and second is the underlying 1. Who are the stakeholders affected and what are the composition, which is often owned by the songwriter or ethical issues in this case? his or her publisher. So, to use a recording, a streaming 2. Is Spotify justified in saying it is prepared to pay but company such as Spotify would have to get two licenses. claimants will have to come to them and present a This is done by negotiating with the publisher or by send- rightful claim? Or, does Spotify have the responsibility ing the rights holder a notice and paying a royalty. to find the artists and secure permission and pay the Lowery claims that Spotify frequently skips the sec- appropriate royalty before they stream the music? ond part. He claims that there may be hundreds or thou- 3. How do you evaluate the company's claim that the sands of artists who have not been paid for their work system is too complex and that the laws and copy- including him. Spotify does not argue against this but right infrastructure are the problem in the digital does say that tracking down the proper rights holders is music industry? a complex process and hard to do. The company says it 4. Is the issue in this case that the law is not keeping has royalties set aside for cases where royalty rights are up with the high-tech music streaming industry or not clear, and it stands ready to pay the royalties if the that Spotify is using this as an excuse to take short affected artists make a rightful claim. But, one of cuts and engage in a questionable practice? Sources: Adrian Covert, Vocative "Spotify is Facing a $150 Million Lawsuit Over Unpaid Royalties," http://www.vocativecomews/265949 spotify-is-facing-a-150-million-lawsuit-over-unpaid-royalties/. Accessed March 25, 2016; "Spotify Isn't Laughing Off This Lawsuit," Bloomberg