Spotify is firing back for the first time at a class action lawsuit claiming its Discovery Mode is a “modern form of payola,” arguing that the allegations are false — and that its users have waived the right to sue anyhow.
In court filings Tuesday (Jan. 20), Spotify asked a judge to essentially end a case filed last fall by Genevieve Capolongo, who says the company’s recommendation tools are a “deceptive pay-for-play” program that allows labels and artists to secretly pay to promote their music.
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Spotify says the lawsuit fails to actually accuse the company of doing anything misleading, meaning the claims are legally invalid. But more importantly, it says all its users have signed binding arbitration agreements that bar them from suing in the first place.
“When plaintiff signed up for Spotify’s streaming service and throughout her relationship with Spotify, plaintiff agreed to the Spotify terms of use,” the company stated in the filings. “The arbitration agreement expressly forecloses ‘jury trials or any other court proceedings.”
Capolongo’s case is one of two recent lawsuits accusing Spotify of allowing its platform to be manipulated. Another case, filed by a rapper named RBX, claims that the streaming giant allowed “billions of fraudulent streams” that boosted the performance numbers of major stars like Drake.
In her November complaint, Capolongo claimed that she and other users believe that Spotify’s suggestions are based on listening tastes, when in reality the company has chosen to “secretly sell those recommendations to the highest bidder.”
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At the time, a spokesperson for Spotify called the accusations “nonsense,” claiming the lawsuit was “riddled with misunderstandings and inaccuracies” about Discovery Mode: “It doesn’t buy plays, it doesn’t affect editorial playlists, and it’s clearly disclosed in the app and on our website.”
In Tuesday’s filing, Spotify echoed those critiques, claiming Capolongo’s attorneys had failed to show “any materially misleading practice, advertisement, or statement” by the company. “Tellingly, Plaintiff also admits that she continues to use and pay for the Spotify service despite being fully informed of the alleged facts that underpin her claims.”
But the core message of Spotify’s response was that the case must be handled via private arbitration — a common tactic by many large companies that require users to sign terms of service. Live Nation is currently litigating a major lawsuit over its use of such waivers.
“Plaintiff’s claims fall squarely within the scope of the arbitration agreement,” Spotify wrote, adding that she had been repeatedly advised of the agreement via emails.
