Spotify is strongly contesting a new class-action lawsuit that alleged that its Discovery Mode programme is manipulated .
Plaintiffs allege that the feature, launched in 2021, allows artistes and labels to increase track visibility in select algorithmic recommendations by agreeing to reduced royalty rates, typically around 30%.
The lawsuit alleges that Discovery Mode fosters a “deceptive pay-for-play” scheme and unfairly disadvantages non-participating creators.
Spotify has dismissed the allegations as untrue. “The allegations in this complaint are nonsense. Not only do they misrepresent what Discovery Mode is and how it works, but they are riddled with misunderstandings and inaccuracies”, the company said in a statement.
The company clarified the feature’s function and scope: “Discovery Mode is a feature artistes can use to flag priority tracks for algorithmic consideration in limited contexts: Radio, Autoplay, and certain Mixes. It doesn’t buy plays, it doesn’t affect editorial playlists, and it’s clearly disclosed in the app and on our website.”
This lawsuit is the second class-action filed against the platform this week. A separate complaint accuses Spotify of overlooking “mass-scale fraudulent streaming.” Addressing the separate fraud allegations, the company stated: “Spotify in no way benefits from the industry-wide challenge of artificial streaming. We heavily invest in always-improving, best-in-class systems to combat it.”
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