Spotify’s Bundling Practices Spark Bipartisan Call for FTC Probe

Senators Marsha Blackburn (R-Tenn.) and Ben Ray Luján (D-N.M.) asked the Federal Trade Commission to investigate Spotify on Friday (June 20). 

In a letter to FTC Chairman Andrew Ferguson obtained by Billboard, the senators accused the streamer of converting “all of its premium music subscribers into different — and ultimately higher-priced — bundled subscriptions without their knowledge or consent.”

“These actions harm consumers,” the senators added, “and could deeply damage the marketplace and the music royalty system.”

In a statement sent to Billboard last year, a Spotify spokesperson said the streamer’s “approach to expanding its offering and raising prices is industry standard. We notify users a month in advance of any price increases and offer easy cancellations as well as multiple plans for users to consider” as part of an effort to “provide consumers incredible value and a best-in-class experience.”

In 2024, Spotify bundled 15 hours per month of audiobook streaming with the standard premium music subscription plans. The company subsequently raised the premium subscription fee in the U.S. — to $11.99 for individuals and $19.99 for families — on July 1. 

Existing subscribers were allowed to opt-out of the higher-priced bundle for a music-only “basic” plan that cost $10.99. However, a Morgan Stanley survey published in January found that only around 7% of U.S. individual premium subscribers and 10% of family plan subscribers chose the less expensive option. 

The streamer’s move to make its premium plan a “bundle” qualified those offerings for a lower mechanical royalty rate in the United States. This quickly drew the ire of music publishers. The NMPA filed a complaint with the FCT last year.

At the NMPA’s annual meeting earlier this month, general counsel Danielle Aguirre said that “one of the biggest challenges” for the organization “continues to come from Spotify’s mischaracterization of its music service into bundles, which forced the conversion of over 44 million subscribers into bundled platforms that those subscribers did not request.”

She said that songwriters and publishers lost $230 million as a result of the change.

“Bundled Premium Plans are apparently aimed at increasing [Spotify’s] profits,” Blackburn and Luján wrote, “while lowering royalty payments to the creative community.”