Judge upholds Spotify bundling win, but royalty dispute continues

On September 1, 2026, a federal judge declined an early appeal against a ruling that allows Spotify USA Inc. to treat its Premium tier as a music-and-audiobook bundle. The decision leaves intact a January 2025 ruling that recognized 15 hours of monthly audiobook listening as having more than token value, legally separating music and audiobook components.

Despite the bundling win, the company still faces calculation claims from the Mechanical Licensing Collective (MLC), which collects royalties for songwriters and publishers. MLC alleges that Spotify allocates subscription revenue incorrectly, that the price of its Audiobooks Access plan overstates audiobook value, and that reporting for music in that standalone tier is flawed. The court also struck down Spotify's defense alleging selective enforcement.

Spotify disclosed roughly €473 million in potential liability covering the period from March 1, 2024 through June 30, 2026 if the bundling classification fails completely. Potential penalties and interest remain unquantified, though direct publisher deals would offer partial offsets. The figure does not include separate calculations for MLC's ongoing accounting claims, which could raise past obligations or future content costs.

The dispute follows strong second-quarter earnings reported on August 4, where Spotify reached 300 million Premium subscribers, an increase of 9% year over year. Quarterly revenue rose 14% to €4.8 billion, gross margin hit 33.4%, and operating income totaled €655 million.