The Mechanical Licensing Collective (MLC) and Spotify are locked in an escalating discovery dispute as part of their ongoing legal battle over mechanical royalty payments.

Key Points of Contention:

• Spotify recently reclassified its main subscription packages as "bundles" after adding audiobook features, resulting in lower mechanical royalty payments
• The MLC argues these packages don't qualify as bundles and claims millions in unpaid royalties
• Both parties participated in a two-hour settlement discussion on September 18th but failed to reach an agreement

Discovery Disputes:

MLC's Demands:

• Documentation of Spotify's decision-making process for audiobook and music-only plans
• Revenue, subscriber, and profit data for the audiobook tier
• Technical architecture information

Spotify's Position:

• Claims to have agreed to 53 of 60+ requests
• Argues the demands are "extremely broad" and "invasive"
• Seeks internal communications between MLC, music publishers, and NMPA
• Requests documents about how MLC treats other streaming platforms' bundles

The dispute highlights fundamental disagreements about bundle classification and appropriate royalty rates, with both sides showing little indication of reaching a settlement soon. Spotify continues to pursue dismissal of the case.

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