Spotify is facing a new class action lawsuit. Filed in the New York federal court, the lawsuit alleges that the Swedish music streaming company uses a “pay-to-play” system that dictates music recommendations and playlist placement. The suit claims this system favours major-label tracks, causing problems for users who expect recommendations based on their listening history. The issue came to light when a Spotify user, Genevieve Capolongo, noted that despite her interest in lesser-known indie artists, the platform repeatedly recommended mainstream tracks from artists like Drake , Zach Bryan, and Justin Bieber .
According to a report by The Hollywood Reporter, the lawsuit alleges that Spotify engaged in deceptive practices and false advertising, among other claims. It seeks unspecified damages and a court order to block Spotify from using paid arrangements to influence playlist and recommendation placements. This lawsuit also requests that Spotify be required to disclose when promotions influence songs on the platform.
What the lawsuit said about Spotify’s “pay-to-play” system
Spotify has become an important platform for music discovery through two kinds of playlists: editorial, curated by staff, and algorithmic, generated by its recommendation system. Both influence what listeners hear, as being featured on major playlists such as Rap Caviar or Today’s Top Hits can significantly increase an artist’s visibility and earnings.
According to the lawsuit, placement on playlists can cost between $2,000 and $10,000, with some payments labelled as “consultancy fees.” The complaint says independent artists are at a disadvantage because major labels, through licensing agreements, gain better access to these playlists and receive preferential treatment in recommendations.
The lawsuit also targets Spotify’s Discovery Mode, which was introduced by the company in 2020. This feature allows artists to promote songs on algorithmic playlists in exchange for reduced royalty payments rather than direct fees.
Critics have compared this to the pay-for-play schemes that once affected the radio industry. Drake referenced this feature in a lawsuit against UMG, criticising lower royalties for greater exposure.
The House Judiciary Committee has also expressed concern that Discovery Mode could “ set in motion a ‘race to the bottom,’” pushing artists to accept lower payouts to remain visible in a competitive environment. Listeners claimed that they are not informed when promoted songs appear, which the lawsuit claims creates the “false impression of neutral, personalised recommendations when financial incentives are quietly driving the algorithm.”
The case, filed by a consumer rather than an artist, argues that Spotify’s marketing, which describes its playlists as “made for you, with you” and based on “personal listening habits” misrepresents how promoted tracks are prioritised.
In the complaint, attorney Innessa Huot wrote: “Even setting the deception aside, Spotify’s business model has made true personalisation impossible.” The filing alleges that Spotify’s structure favours major-label artists, reinforcing their visibility and keeping them dominant on the platform.
The lawsuit follows another class action accusing Spotify of allowing large-scale streaming fraud that redirects royalties away from artists whose play counts are genuine.
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What Spotify said about the lawsuit
In a statement to The Hollywood Reporter, Spotify described the allegations as “nonsense.” The company said: “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.”
Spotify added that the lawsuit misrepresents “basic facts,” claiming it wrongly suggests Discovery Mode is applied across all algorithmic playlists. The company also denied that the feature benefits only major-label artists, stating that it is widely used by both major- and independent-label acts.
According to a report by The Hollywood Reporter, the lawsuit alleges that Spotify engaged in deceptive practices and false advertising, among other claims. It seeks unspecified damages and a court order to block Spotify from using paid arrangements to influence playlist and recommendation placements. This lawsuit also requests that Spotify be required to disclose when promotions influence songs on the platform.
What the lawsuit said about Spotify’s “pay-to-play” system
Spotify has become an important platform for music discovery through two kinds of playlists: editorial, curated by staff, and algorithmic, generated by its recommendation system. Both influence what listeners hear, as being featured on major playlists such as Rap Caviar or Today’s Top Hits can significantly increase an artist’s visibility and earnings.
According to the lawsuit, placement on playlists can cost between $2,000 and $10,000, with some payments labelled as “consultancy fees.” The complaint says independent artists are at a disadvantage because major labels, through licensing agreements, gain better access to these playlists and receive preferential treatment in recommendations.
The lawsuit also targets Spotify’s Discovery Mode, which was introduced by the company in 2020. This feature allows artists to promote songs on algorithmic playlists in exchange for reduced royalty payments rather than direct fees.
Critics have compared this to the pay-for-play schemes that once affected the radio industry. Drake referenced this feature in a lawsuit against UMG, criticising lower royalties for greater exposure.
The House Judiciary Committee has also expressed concern that Discovery Mode could “ set in motion a ‘race to the bottom,’” pushing artists to accept lower payouts to remain visible in a competitive environment. Listeners claimed that they are not informed when promoted songs appear, which the lawsuit claims creates the “false impression of neutral, personalised recommendations when financial incentives are quietly driving the algorithm.”
The case, filed by a consumer rather than an artist, argues that Spotify’s marketing, which describes its playlists as “made for you, with you” and based on “personal listening habits” misrepresents how promoted tracks are prioritised.
In the complaint, attorney Innessa Huot wrote: “Even setting the deception aside, Spotify’s business model has made true personalisation impossible.” The filing alleges that Spotify’s structure favours major-label artists, reinforcing their visibility and keeping them dominant on the platform.
The lawsuit follows another class action accusing Spotify of allowing large-scale streaming fraud that redirects royalties away from artists whose play counts are genuine.
'
What Spotify said about the lawsuit
In a statement to The Hollywood Reporter, Spotify described the allegations as “nonsense.” The company said: “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.”
Spotify added that the lawsuit misrepresents “basic facts,” claiming it wrongly suggests Discovery Mode is applied across all algorithmic playlists. The company also denied that the feature benefits only major-label artists, stating that it is widely used by both major- and independent-label acts.
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