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Spotify and Sosa pause litigation to allow settlement negotiations to proceed

By | Published on Monday 25 January 2021


Spotify and American independent music firm Sosa Entertainment have told a court in Florida that they are now seeking to negotiate a settlement deal in their ongoing legal dispute over the former’s decision to remove the latter’s recordings from its platform.

Sosa sued Spotify in 2019. It accused the streaming firm of “unfair and deceptive practices” because of its decision to remove the label’s catalogue from its platform. That move, Sosa said, also resulted in it losing its membership of indie label digital rights group Merlin.

Spotify then countersued in May last year, arguing that it dropped the Sosa catalogue because it suspected the label – and its founder Jake Noch – of fraudulently manipulating streams of that music in order to boost its share of the monthly royalties pot.

In a strongly worded legal filing, Spotify said there were “blatant signifiers of artificial streaming” linked to Sosa’s recordings, concluding that “Jake Noch is a fraudster who has engaged in a multi-year campaign to generate artificial streams on Spotify’s online music service”.

Noch responded in similarly bold language, stating: “Spotify’s claims are laughable and blatantly false. A company such as Spotify, that is built on the theft of intellectual property, puts every single one of its shareholders at risk. I foresee Spotify becoming the next Enron”.

The dispute then rumbled on for all of last year, with Spotify at one point trying to get elements of the Sosa lawsuit dismissed on the grounds they failed as a matter of law.

The streaming firm continued to present its case in blunt terms, stating: “It is apparent that – while none of Sosa’s claims have any merit – three of them so plainly fail as a matter of law to warrant judgment on the pleadings”.

However, that tough talking from both sides may now not continue in court, because settlement talks are underway. In a filing made with the court earlier this month, both parties asked that the proceedings be put on hold for 60 days “to allow the parties to attempt to negotiate a resolution of this matter”.

The legal filing stated: “The parties have recently made progress towards a potential resolution of the litigation. Rather than continuing to expend time and resources litigating the case, the parties propose a brief, 60 day stay of the proceeding in order to focus on attempting to resolve this matter. The parties assert that a stay is appropriate in order to conserve the parties’ and the court’s time and resources by avoiding litigation that will be unnecessary if the case is resolved”.

Both Spotify and Sosa added that they would update the court on the progress of those settlement talks within the 60 days. We await with interest to see if such a settlement can be agreed.