May 17 (Reuters) - Spotify ( SPOT ) has been hit with a lawsuit

in New York federal court that accuses the streaming giant of

underpaying songwriting royalties for tens of millions of songs.

The lawsuit, filed late Thursday by the royalty-gathering

nonprofit Mechanical Licensing Collective, said that Spotify ( SPOT )

underreported its revenue by nearly half in order to avoid

paying millions of dollars that it owes to the group.

The complaint cites a Billboard report that estimates

Spotify's ( SPOT ) move could cost songwriters nearly $150 million over

the next year.

"Spotify ( SPOT ) paid a record amount to publishers and societies in

2023 and is on track to pay out an even larger amount in 2024,"

a Spotify ( SPOT ) spokesperson said in a statement on Friday. "We look

forward to a swift resolution of this matter."

MLC chief executive Kris Ahrend said in a statement that the

collective "takes seriously its legal responsibility to take

action on behalf of our members when we believe usage reporting

and royalty payments are materially incorrect."

U.S. law allows streaming services like Spotify ( SPOT ) to obtain a

blanket "compulsory license" to copyrighted music at a specific

royalty rate. The U.S. Copyright Office appointed MLC to collect

royalties for songwriters and music publishers.

The group's lawsuit said that after adding audiobook access,

Spotify ( SPOT ) incorrectly recharacterized its service in a way that

would significantly reduce the amount of royalties it owed under

the license, "even though there has been no change to

[Spotify's ( SPOT )] Premium plan and no corresponding reduction to the

revenues that Spotify ( SPOT ) generates."

"Spotify's ( SPOT ) attempt to reduce its mechanical royalties has

resulted in a clear breach of its obligations," the complaint

said.

The MLC asked the court for an unspecified amount of

monetary damages for Spotify's ( SPOT ) alleged unpaid royalties and late

fees.

The case is Mechanical Licensing Collective v. Spotify USA

Inc, U.S. District Court for the Southern District of New York,

No. 1:24-cv-03809.

For the MLC: Jay Cohen and Darren Johnson of Paul Weiss

Rifkind Wharton & Garrison

For Spotify ( SPOT ): attorney information not yet available