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In a lawsuit filed in Florida on Monday (Nov. 25), indie hip-hop label Sosa Entertainment alleges that Spotify failed to pay royalties on more than 550 million streams of its music.
The label's sister company, the roughly 2-year-old public performance rights organization Pro Music Rights, is also named a plaintiff in the suit. Both Sosa and Pro Music Rights are based in Naples, Fla. and were founded by Jake Noch, who is just 20 years old, according to his LinkedIn profile.
Based on court documents obtained by Billboard, the trouble started in May 2017, when the plaintiffs claim Spotify abruptly removed all their music from the platform due to "abnormal streaming activity."
This happens when Spotify has reason to believe streams are illegitimate -- say, if the majority of streams are coming from brand-new user accounts. But the plaintiffs claim their streams are the real deal, and that Spotify removed them in order to "avoid having to pay royalties."
The lawsuit also ropes in global digital rights agency Merlin, which inked a licensing deal with Spotify in April 2017. Sosa, which was a member of Merlin at the time, would have been entitled to equity in Spotify under the agreement. But the plaintiffs claim that Spotify's "blacklisting" of their catalog soiled their relationship with Merlin, which terminated its contract with Sosa.
In the lawsuit, Pro Music Rights, which was founded in January 2018, says it has approximately 2 million works in its repertoire, including music by rapper OG Maco, whose 2014 debut single "U Guessed It" featuring 2 Chainz cracked the Hot 100. Sosa is described as a "successful hip-hop record label, distributor, promotor and music publishing company" with plans to expand into a digital distribution and marketing service.
The plaintiffs are seeking statutory damages of $150,000 for each act of alleged infringement.
A representative for Spotify declined to comment.
Over email, the plaintiffs' attorney Rich Gora of Gora LLC said: "Spotify will continue to indulge in its vice of deceiving artists and not paying for musical streams until someone stops it. Unlike other plaintiffs suing Spotify just for infringement, our clients are the first to take on Spotify's unfair and deceptive practices of making up facts in order to take money away from artists. Pro Music Rights and Sosa Entertainment have the resources and grit to see this through to a jury verdict."
Added Noch: "I look forward to redemption from Spotify, after all it has put us through in the past couple years. Spotify is notorious for dragging out litigations for years and years to outspend plaintiffs. I will fight to the end. I have a duty to see this through so that I can pay my artists what they are owed from Spotify. Most importantly, I want to get my artists unbanished from Spotify, so their fans can continue to listen to great music. I know others feel the same way as I blaze this trail for the music community, who I know is behind me and roots for our success in bringing down Spotify."
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