Spotify's Possible Bundling Bill Rises to EUR 538 Million
Spotify says it could owe EUR 538 million (USD 619 million) if it loses its royalty lawsuit with the Mechanical Licensing Collective outright. The figure appears in the "Commitments and contingencies" note to the streaming company's third-quarter 2026 financial statements, filed with the US Securities and Exchange Commission, and it is up EUR 65 million from the EUR 473 million disclosed in its second-quarter filing.
The Mechanical Licensing Collective, known as the MLC, is the US body that collects royalties for songwriters and music publishers when their songs are reproduced, including by streaming services. It sued Spotify in May 2024, arguing that the company underpaid royalties due under a compulsory licence, the standard arrangement that lets services use songs without negotiating each one.
At the heart of the case is a question about packaging. A bundle is a group of products sold together, and the rules treat bundled subscriptions differently when it comes to royalty rates. The court has ruled that Spotify Premium is a bundle under the applicable regulations. The MLC argues it is not.
Several rulings have followed. In an order dated September 1, US District Judge Analisa Torres denied the MLC's request to certify an interlocutory appeal, which would have sent the bundle ruling to a higher court before the case ends. The same order granted the MLC's motion to strike Spotify's "unclean hands" defence, an argument that the other side has behaved improperly, which removes it from the case.
Spotify's own estimates have grown steadily. Its first estimate, EUR 46 million, covered March 1 to June 30, 2024. The figure reached EUR 256 million by the end of June 2025, EUR 410 million at the end of March 2026, and EUR 473 million after the next quarter. The newest estimate covers March 1, 2024 to September 30, 2026.
The company is clear about what the number does and does not include. The EUR 538 million would apply only if the MLC were entirely successful in its claim. It also excludes potential penalties and interest, which Spotify says it cannot reasonably estimate. Spotify further states that any bundling liability would be partly offset by direct deals it has with publishers.
The filing landed a few days after Spotify's quarterly results. On October 22, the company reported 306 million Premium subscribers and quarterly operating income of EUR 672 million, according to Music Business Worldwide.
For songwriters and publishers, the case is about money that would be paid to them if the MLC's position prevails. For Spotify, it is a liability that grows every quarter the dispute runs on. A court date, a settlement or a final judgment would change the picture, and none has been reported as of October 27, 2026.
