Federal Judge Sends Spotify ‘Payola’ Lawsuit to Arbitration, Halts Case
The streaming giant had been accused of taking a pay-for-play approach
Federal Judge John G. Koeltl of the Southern District of New York has halted a proposed class action against Spotify, sending the dispute to arbitration.
The claim:
Spotify subscriber Genevieve Capolongo alleged the platform misled listeners by promoting songs through paid arrangements with labels.
She argued Spotify’s “Discovery Mode” acts like “modern payola,” boosting tracks in exchange for reduced royalties while presenting playlists as personalized recommendations.
Capolongo sought over $5 million in damages on behalf of a proposed class.
The response:
Spotify cited its Terms of Use, which include a mandatory arbitration clause.
The company said users agree to these terms when signing up and are notified of updates.
Court ruling:
Judge Koeltl ruled in Spotify’s favor, finding Capolongo had accepted the arbitration terms by continuing to use the service after multiple notifications.
He dismissed the class action claims with prejudice.
Next steps:
The dispute will now proceed through arbitration, meaning Capolongo must pursue her claims individually rather than as part of a class.
👋 Disclosures & Transparency Block
This story was written with information from Music Business Worldwide.
We covered it because it’s news of a lawsuit involving Spotify.
