Spotify Accused of ‘Modern Payola’ in Second Explosive New Class-Action Lawsuit
Written by b87fm on 11/04/2025
Spotify is facing fresh legal heat as a second class-action lawsuit claims the streaming giant is secretly selling influence over what millions of listeners hear — reviving the industry’s oldest scandal: pay-for-play.
Filed Tuesday (Nov. 4) in Manhattan federal court by New York subscriber Genevieve Capolongo, the 39-page complaint accuses Spotify of committing “modern payola” through its Discovery Mode program and other undisclosed promotional arrangements. The lawsuit alleges that Spotify’s algorithmic playlists — including Discover Weekly and its AI-driven DJ — are not purely personalized, but are covertly shaped by financial deals with artists and labels.
Capolongo argues that Spotify “charges listeners for the privilege of being deceived,” claiming users are misled into thinking their playlists are organic when they’re actually influenced by record labels willing to accept reduced royalties for better placement.
“Spotify exploits that trust by marketing itself as a platform that offers organic music recommendations … only to secretly sell those recommendations to the highest bidder,” the complaint reads.
Filed by Faruqi & Faruqi LLP and Stephan Zouras LLC, the case paints Spotify’s curation system as a digital echo of radio’s old payola scandals — the illegal practice of paying for airplay without disclosure, which dates back to the 1930s.
Capolongo’s legal team says she subscribed to Spotify expecting authenticity but found her feed flooded with superstar names like Drake and Justin Bieber, regardless of her personal preferences.
“She still cannot discern which songs are recommended for legitimate editorial or personalized reasons and which are promoted due to undisclosed commercial arrangements,” attorney Innessa M. Huot said.
The suit seeks restitution, punitive damages, and a court order forcing Spotify to disclose when paid or royalty-discounted promotions influence recommendations. It accuses the company of false advertising, deceptive practices, unjust enrichment, and violations of FTC endorsement rules by failing to label such placements as ads.
Spotify has yet to issue a public response.
The lawsuit follows another high-profile class action filed days earlier by West Coast rap veteran RBX, who accuses Spotify of ignoring billions of bot-generated streams that allegedly inflate major artists’ numbers — particularly those of Drake — while undercutting smaller creators’ pay.
With two major class actions in one week, Spotify faces intensifying scrutiny over its algorithms, royalty structures, and transparency, as critics claim the world’s largest streaming platform has blurred the line between music discovery and manipulation.
