Napster and Sonos hit with $3.4M royalty lawsuit: Here's why
What's the story
Napster and Sonos are facing a lawsuit over alleged unpaid copyright royalties.
The complaint, filed by non-profit music rights group SoundExchange, seeks more than $3.4 million from the two companies.
It centers on missed payments for the "Sonos Radio" service that used Napster's music catalog until 2023.
The lawsuit was filed in a California federal court and accuses both companies of underpaying statutory copyright royalties for this service.
Audit findings
Issues came to light during 2023 audit
The alleged payment issues came to light during a 2023 audit by SoundExchange. The investigation revealed that Sonos and Napster owed millions in unpaid royalties.
This was after the companies ceased their partnership for the radio service, with Sonos switching to Deezer around April 2023.
Despite this change, SoundExchange still claims it is owed over $3 million from the period of October 2022 to April 2023.
Legal proceedings
Lawsuit details and companies' response
The lawsuit details one count of "underpayment" and one count of "non-payment" of royalties, both violations under the Copyright Act.
SoundExchange is seeking damages of at least $3.4 million for these violations. Neither Sonos nor Napster has publicly responded to the lawsuit as yet.