Spotify to cease operations in Uruguay over copyright laws

As has been reported in the music press, the well-known digital music service Spotify has announced that it will be imminently ceasing its operations in Uruguay due to certain amendments included in the country's copyright laws regarding the remuneration of performers.  

The law

The law which Spotify refers to in its statement (which has been reproduced in full by Music Business Worldwide here), is the 2023 Rendición de Cuentas bill (the Bill), which was voted through by Uruguay's parliament in October this year. 

Article 285 of the Bill, in particular, was introduced following submissions from the Uruguayan Society of Performers, and includes a modification to Uruguay's copyright law in order to introduce the right to "fair and equitable remuneration" for authors, composers, performers, directors, and screenwriters, for agreements falling within the scope of the provision. 

Article 284 also broadened the scope of financial remuneration for performers, particularly in respect of content shared online. 

Spotify's statement

Following the passing of the Bill through parliament, Spotify stated that the changes to Uruguay's copyright law, and particularly the lack of clarity over whether the changes meant that any additional costs would be picked up by rightsholders, could "force Spotify to pay twice for the same music", which "would make [Spotify's] business of connecting artists and fans unsustainable”.

This would "regrettably leave [Spotify] no choice but to stop being available in Uruguay”.  

Spotify will therefore be phasing out its service from 1 January 2024, with a view to fully cease all operations in the market by February. 

Uruguayan Kat wondering where to find music now... 

Photo: David Precious

Repercussions elsewhere? 

Some in the music industry may speculate that Spotify's decision, to cease operations in a territory in which it is more likely to be able to afford to do so, is a way of sending a message to decision-makers in those larger markets where similar laws are being introduced or contemplated, namely the EU and the UK. 

In the UK, for example, the Copyright (Rights and Remuneration of Musicians, Etc.) Bill (the UK Bill) has been slowly making its way through Parliament since 2021 (see the IPKat's coverage here), and includes provisions on equitable remuneration for music streaming.  

Although it might not seem likely to become law in the imminent future, it has certainly encouraged industry discussions about the issue, including the establishment of working groups set up with the objective of coming up with industry-led solutions. Absent such solutions, legislators may well step back in. 

Similarly, Belgium in 2022 introduced a performer equitable remuneration right for streaming in its implementation of the Directive (EU) 2019/790 (despite the fact that the right was specifically not included in the Directive itself). As recently covered by the IPKat (here), this right has been challenged by a number of streaming services (including Spotify, Sony Music and others) before the Belgian Constitutional Court.

Comment

Clearly the issue of equitable remuneration for streaming is one which will continue to be hotly debated in upcoming copyright reforms, and it will be interesting to see whether Spotify's decision in Uruguay has any sway on regulators and legislators in other territories, or whether they feel confident enough to call Spotify's "bluff".