A man in Denmark was sentenced to 18 months in prison today for using fake accounts to trick music streaming services into paying him 2 million Danish kroner ($290,000) in royalties. The unusual case reveals a weak spot in the business model behind the world’s biggest music platforms.
The 53-year-old consultant, who had pleaded not guilty, was convicted of data fraud and copyright infringement after using bots to listen to his own music through fake profiles on both Spotify and Apple Music, collecting royalties in the process. The data fraud took place between 2013 and 2019.
Fake or “artificial” streams are a big problem for the streaming industry. Between 1 billion and 3 billion fake streams took place on popular music platforms in 2021, according to a study by France’s National Music Center. Fake streams are a problem, according to the music industry, because they divert royalty payments away from real artists and pollute streaming platforms’ data.
“This is an example of a problem that’s becoming a liability within the music industry,” says Rasmus Rex Pedersen, an associate professor in communication at Roskilde University in Denmark, who researches music streaming. “The streaming services have had several years to develop tools to combat this type of fraud and apparently they haven’t been doing a very good job.” There are still services advertising sales of fake streams, he adds.
In February, a court in the Danish city of Aarhus heard how the man, whose name was withheld, was accused of using bots to generate a suspiciously high number of plays on 689 tracks, which he had registered as his own music. In one week, 244 music tracks were listened to 5.5 million times, with 20 accounts responsible for the majority of the streams. The defendant had previously argued these playbacks were linked to his job in the music industry. He plans to appeal, his lawyer Henrik Garlik Jensen told WIRED.
The man created software that played the music automatically, claims Maria Fredenslund, CEO of the Danish Rights Alliance, which protects copyright on the internet and first reported the case to the police. “So he didn’t really listen to the music. No one really listened to the music.” According to the Danish Rights Alliance, the defendant had 69 accounts with music streaming services, including 20 with Spotify alone. Due to his network of accounts, he was at one point the 46th highest-earning musician in Denmark.
While the defendant created much of the music himself, 37 tracks were altered versions of Danish folk music, where the tempo and pitch had been changed, adds Fredenslund, who attended court.
Starting in 2016, Danish artists noticed altered versions of their tracks circulating on streaming platforms. They reported the suspicious activity to Koda, a Danish organization that collects and distributes fees for songwriters and composers when their music is played online. In an investigation, Koda uncovered how amounts paid to the consultant went from zero to substantial sums in a short time. Koda then reported the case to the Danish Rights Alliance, which investigates fraudulent behavior. “It’s not just immoral, but blatantly unfair to manipulate payments that should rightfully go to dedicated and hardworking music creators,” says Jakob Hüttel, legal chief at Koda.
Court cases like the one in Denmark are rare, says Rex Pedersen. Usually when streaming services detect fake listeners, the companies block future payments but stop short of pursuing legal action. This case, however, was detected by Danish musicians before it was flagged to industry groups, and it was eventually reported to the police.
“The convict and his company have, for many years, at the expense of other music artists and rights holders, received royalties that they should never have received,” Amir Amirian, special prosecutor at Denmark’s National Unit for Special Crime, said in a statement. The court confiscated 1 million Danish kroner from the man and another 1 million from the company he used to commit the crime, the NSK added.
“We are pleased that the court has affirmed that streaming fraud is deeply criminal and serious,” says Fredenslund. “It’s a historic verdict that sends a strong signal about the severity of stream manipulation challenges.”
Both Spotify and Apple Music declined to answer WIRED’s questions about how much money the companies paid out to the man on trial. “Manipulated streams are an industry-wide challenge, and Spotify is working hard to address this issue,” Luke Mackay, Spotify spokesperson told WIRED, declining to comment on the individual case. “When we identify stream manipulation, we take action that may include correcting stream counts, withholding royalties, and in some cases, removing content.”
In November 2023, Spotify introduced a new royalty system which the company said was intended to combat artificial streaming. “Spotify invests heavily in detecting, preventing, and removing the royalty impact of artificial streaming,” the company said at the time. “Still, bad actors continue to attempt to steal money from the royalty pool that should be delivered to honest, hardworking artists.”
Source : Wired
