Spotify pushed back against a new class-action lawsuit filed in federal court that accuses the streaming giant of reviving payola through its controversial Discovery Mode feature.
The complaint, filed Tuesday (November 4) in Manhattan by New York resident Genevieve Capolongo, claims Spotify misleads subscribers by promoting algorithm-based playlists like “Discover Weekly” and its AI-powered “DJ” while allegedly allowing labels to pay for increased visibility through royalty discounts.
Capolongo alleges the platform “charges listeners for the privilege of being deceived,” arguing Spotify fails to disclose that some playlist recommendations are influenced by financial arrangements.
The lawsuit compares the practice to the well-known radio payola scandals of the 20th century and seeks restitution, punitive damages and a court order requiring Spotify to reveal when money or royalty deals factor into playlist placement.
In a sharp rebuttal, Spotify dismissed the accusations as baseless and riddled with errors.
“The allegations in this complaint are nonsense,” the company said. “Not only do they misrepresent what Discovery Mode is and how it works, but they are riddled with misunderstandings and inaccuracies.”
Spotify explained that Discovery Mode allows artists to highlight specific songs for algorithmic consideration in limited areas such as Radio, Autoplay and select Mixes.
The company emphasized that the tool does not influence editorial playlists or guarantee plays.
“Discovery Mode is a feature artists can use to flag priority tracks for algorithmic consideration in limited contexts: Radio, Autoplay, and certain Mixes. It doesn’t buy plays, it doesn’t affect editorial playlists, and it’s clearly disclosed in the app and on our website,” the statement continued.
Spotify also pointed out that the lawsuit misrepresents how Discovery Mode functions, noting it is not used in all algorithmic playlists, including “Discover Weekly” or “DJ,” as the suit claims.
“The complaint even gets basic facts wrong: Discovery Mode isn’t used in all algorithmic playlists, or even Discover Weekly or DJ, as it claims,” the company added.
The platform further rejected the idea that Discovery Mode favors major labels, saying the feature has been widely adopted by independent artists.
“It’s also wrong to suggest Discovery Mode only supports major label artists. In fact, it’s been widely embraced by the independent music community, many of whom have praised the program publicly,” Spotify said.
This lawsuit comes just days after another class-action complaint was filed by West Coast rapper RBX, who accused Spotify of turning a blind eye to fraudulent streams that inflate numbers for top-tier artists like Drake while reducing payouts for smaller acts.
Both legal challenges have intensified scrutiny of Spotify’s algorithmic transparency and its promotional practices. The Capolongo case was filed in federal court on November 4.