Spotify Flags $619 Million Liability in MLC Case
The streaming service's latest SEC filing raises its estimated exposure in a royalty dispute over how it bundles audiobook access into Premium.
Updated on Nov. 1, 2026 in Music — General
Spotify's Q3 2026 SEC filing puts its potential liability in the Mechanical Licensing Collective's bundling case at about €538 million, or $619 million, covering March 1, 2024 through September 30, 2026. The figure is up from €473 million in the prior quarter's filing.
Why it matters
The estimate has grown steadily since the MLC sued in May 2024, signaling that the royalty dispute over Premium bundling could carry substantial costs for the streaming industry in the United States. The filing also notes potential penalties and interest that the company cannot reasonably estimate.
Spotify's liability estimate rose from €46 million in July 2024 to €256 million by June 2025 and another €217 million by June 2026, with the latest quarter adding €65 million. Whether the final figure will change depends on the summary judgment ruling and any publisher settlements, which the filing does not quantify.
The players
Mechanical Licensing Collective (MLC)
The U.S. nonprofit responsible for collecting and distributing mechanical royalties for songwriters and publishers, which sued Spotify over its Premium bundling.
Spotify
The Swedish-founded global audio streaming platform whose Premium bundling practices are at the center of the royalty dispute.
Analisa Torres
The U.S. District Judge presiding over the case, who issued the September 1 order on the appeal request and the unclean hands defense.
The details
U.S. District Judge Analisa Torres issued a September 1 order denying the MLC's request for an immediate appeal while granting its motion to strike Spotify's unclean hands defense. The MLC alleges Spotify underpaid royalties by classifying Premium as a bundle that includes audiobook access, and its amended complaint, filed October 1, 2025, targets how Spotify valued those parts and reported royalties.
Timeline
May 16, 2024: The MLC sued Spotify over the Premium bundling classification.
July 2024: Spotify disclosed its first liability estimate of €46 million.
October 1, 2025: The MLC filed an amended complaint.
September 1, 2026: Judge Torres denied immediate appeal and struck the unclean hands defense.
September 30, 2026: The liability estimate period ended in Spotify's Q3 2026 filing.
Industry Dynamics
The dispute is a test case for how the Mechanical Licensing Collective, created under the Music Modernization Act of 2018, enforces mechanical royalties against large streaming platforms. Its outcome could shape how bundled subscription tiers are priced across the music streaming industry.
Spotify subscribers are not directly affected by the liability estimate itself, but the outcome could influence how Premium tiers and audiobook access are packaged. Any change in royalty obligations may shape pricing and plan structures available to users in the United States.
The takeaway
Royalty disputes over bundled subscriptions can grow substantially as liability estimates are updated each quarter, so readers should watch future SEC filings for changes. The final outcome may hinge on pending court rulings rather than company statements.
What happens next
The case is moving toward summary judgment, which will determine how much of the estimated liability Spotify may ultimately owe.
Further reading
For more on the business of recorded music, see Music — General coverage.
Source note: This article includes information reported by Radio Facts Media.
