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The original was posted on /r/truespotify by /u/frogaranaman on 2024-06-23 11:41:06+00:00.

Hi all! Might be a bit of a confusing title, so let me explain a bit.

The NMPA (National Music Publishers Association) filed a complaint with the FTC against Spotify on June 12th, claiming ‘unfair, deceptive and fraudulent business practices’ regarding the new bundled music + audiobook plans Spotify introduced. They did this to oppose the lower royalty rates that it will induce for musicians and songwriters, estimated at a $150M loss per year. You can read more about the complaint in the article I linked, it’s super helpful context.

Now, why is this relevant? Well, the penalty for fraudulent business practices by the FTC is up to $50,120 per violation. In this case, the violation would be one US payment in which they fraudulently overcharged their subscription. If found guilty of fraudulent business practices, each US subscription would count as a violation.

This begs the question of how many US subscribers Spotify has, which is a bit tricky to find since they list US and Canadian subscription numbers together. Spotify has 239M subscribers worldwide, with NA being 27% of that number (64.53M). The US population is 333.3M, and the Canadian population is 38.93M. In total, the population is 372.23M, so roughly 89.5% of that is the US. We can use that percentage to guess the subscriber count, so roughly 57.78M of those subscribers are US-based.

So if Spotify was found to be partaking in fraudulent business practices by raising subscription prices across their US subscriber base, they would face up to $2,895,933,600,000 in fines. In fact, the fine that would equal Spotify’s overal value ($63.02B) is $1,038. In most cases, they were absolutely fucked. I’m sure their legal team did the math, realized how bad it was, and was able to convince the executives to make the move that actually keeps the company in existence and avoids the investigation from this complaint.

So congrats to the NMPA for getting Spotify to admit defeat and actually make them do something consumer friendly for once!