Photo Credit: Rubaitul Azad
New year, same Mechanical Licensing Collective v. Spotify legal battle, which has hit the ground running in 2026 with an intensifying showdown over the MLC’s appeal efforts.
Coming up on the second anniversary of its kickoff, that increasingly convoluted courtroom confrontation was technically tossed with prejudice in early 2025. As we reported then, the court sided with Spotify by determining that the DSP’s (audiobook and music) Premium bundling reclassifications were lawful.
By now, most are aware of the seemingly minor maneuver’s huge mechanical royalties fallout. Subsequent direct deals or not, and with the specter of Phono V negotiations looming large, the streaming platform is still taking heat for its bundling obsession.
(Said heat includes a bipartisan Senate letter from this past summer, when lawmakers voiced “serious concerns” about the bundles and demanded an FTC investigation.)
However, while the criticism has been steady from the get-go, the case’s direction shifted significantly during 2025’s final few months.
In brief, by retooling its arguments based on the court’s bundling determination, the MLC successfully revived the suit despite the dismissal with prejudice.
Those adjusted allegations – pertaining to the price behind Spotify’s audiobooks-only subscription and whether the latter actually constitutes a standalone plan given the presence of music – are admittedly a thorn in the DSP’s side.
But they don’t pack quite the same punch as the challenge to Spotify’s bundles themselves. Like the MLC previously pointed out, if it went on to score an appeals win on the bundling issue – “a controlling question of law” – “Spotify will owe songwriters potentially hundreds of millions of dollars in unpaid royalties.”
“If, on the other hand, the Second Circuit affirms this Court’s Order finding that Premium is a Bundle as a matter of law,” the MLC continued, “the ruling’s precedent would materially impact the way the MLC assesses the compliance of the usage reports submitted by other digital music services. In either scenario, the consequences are significant.”
And at the center of the MLC’s position, granting interlocutory review of the January 2025 bundling-argument dismissal would prevent “duplicative proceedings” if the amended complaint heads to trial.
(Alternatively, should the court reject the interlocutory appeal motion, the filing party has asked for “a partial final judgment that the MLC may appeal expeditiously.”)
“If the Second Circuit ultimately disagrees with the Order [dismissing the MLC’s initial bundling lawsuit], the MLC’s original claims would be reinstated, requiring re-litigation of the case with additional discovery, additional motion practice, and a second trial. Granting interlocutory review now would allow for the full and final resolution of all of the MLC’s claims together, without duplicative proceedings,” the plaintiff spelled out.
Spotify is, of course, on a decidedly different page; in its new retort, the DSP framed the MLC’s interlocutory appeal push as “another do-over after nearly a year of resource-intensive motions practice and discovery.”
“MLC also wholly fails to show that an interlocutory appeal would materially advance the ultimate termination of litigation. … To the contrary, it would unnecessarily multiply the proceedings by forcing the parties to simultaneously litigate an interlocutory appeal in the Second Circuit, while continuing to pursue discovery and motions practice in this Court on MLC’s newly added claims it is simultaneously trying to render moot,” Spotify vented.
Furthermore, the MLC’s request should separately be denied because of the alleged “strategic delay in pursuing an appeal from this Court’s dismissal order,” according to Spotify, which stressed the firm nature of said dismissal order (and the alleged absence of an appeal justification) as well.
“In short, because audiobooks consist of recorded books while music streaming is music, under a common sense reading of the regulations, Premium undoubtedly combines music streaming ‘with one or more other products or services,’” penned Spotify, which seems to be sunsetting its little-discussed “Basic” tier.
As for what’s on the MLC v. Spotify horizon – besides a decision on the all-important appeal, that is – the court has scheduled a case management conference for the afternoon of Thursday, January 22nd.
