Spotify’s potential liability if the Mechanical Licensing Collective (The MLC) wins its ‘bundling’ lawsuit outright has risen to approximately EUR €538 million (USD $619m).
That’s according to the notes to Spotify’s Q3 2026 financial statements, filed with the US Securities and Exchange Commission.
The figure is up by €65 million from the €473 million Spotify disclosed in its Q2 2026 filing.
Both figures are cumulative from March 1, 2024, and both apply only if The MLC is “entirely successful” in its claim that Spotify’s Premium service is not a bundle.
The court has already ruled that Premium is a bundle, so that outcome would depend on The MLC overturning the ruling on appeal once the rest of the case is resolved.
Spotify published its Q3 2026 results on October 22, reporting 306 million Premium subscribers and quarterly operating income of €672 million.
The €538 million estimate appears in the ‘Commitments and contingencies’ note to the financial statements.
Spotify says in the filing: “If the MLC were to ultimately be entirely successful in its claim alleging that Spotify’s Premium Service is not a bundle, then the liability in relation to the period March 1, 2024 to September 30, 2026 would be approximately €538 million, plus potential penalties and interest, which we cannot reasonably estimate.
“Any liability would be partially offset by direct deals with publishers.”
Spotify has updated the estimate in its filings since The MLC sued it in May 2024.
The company’s first estimate, reported by MBW in July 2024, was €46 million, covering March 1 to June 30, 2024.
By the end of June 2025, the figure had reached €256 million, according to Spotify’s Q2 2025 filing.
Between June 30, 2025, and June 30, 2026, the estimate rose by €217 million, an average of just over €54 million per quarter.
The latest quarterly increase, of €65 million, is above that average. It is in line with the previous quarter, when the estimate rose by €63 million from €410 million at the end of March 2026.
Spotify’s filing does not say what drove the increase.
The Q3 filing is also Spotify’s first to reflect a September ruling in the MLC case.
It states that the court has denied The MLC’s request to pursue an immediate appeal of its ruling that Premium is a bundle under the applicable regulations.
US District Judge Analisa Torres issued that decision in an order dated September 1.
“MLC has not met its burden to show that there is a ‘substantial ground for difference of opinion’ as to the Court’s dismissal order, and, accordingly, the Court denies its request to certify an interlocutory appeal,” wrote Judge Torres.
Torres added: “The Court adheres to its opinion that the plain text of § 385.2 leaves no ambiguity as to whether Premium combines ‘one or more products or services’ having ‘more than token value’ with a subscription music streaming service.”
The same order granted The MLC’s motion to strike Spotify’s ‘unclean hands’ defense.
That defense rested on Spotify’s assertion that The MLC had not challenged other licensees over how they report bundles of music and audiobooks.
“This defense has no basis in law… It should, therefore, be stricken,” wrote Torres.
The MLC filed its lawsuit on May 16, 2024, alleging that Spotify had underpaid royalties since its March 2024 reporting by classifying Premium as a bundle that includes audiobook access.
Judge Torres dismissed the original complaint in January 2025, holding that Premium is a bundle.
The court later allowed The MLC to file an amended complaint, which it did on October 1, 2025.
The amended complaint targets how Spotify valued the different parts of the Premium bundle, and how it reported royalties for its Audiobooks Access plan.
The case is now moving toward summary judgment. Under a revised schedule approved on October 9, pre-motion letters for summary judgment are due by December 11.
Since January 2025, Spotify has signed direct US publishing deals with Universal Music Publishing Group, Warner Chappell Music, Kobalt, Sony Music Publishing, and BMG, as MBW reported earlier this month.
The bundling dispute has also surfaced in Phonorecords V, the US Copyright Royalty Board proceeding that will set the mechanical royalty rates streaming services pay songwriters and publishers from 2028 to 2032.
In their filing in that proceeding, the National Music Publishers’ Association (NMPA) and the Nashville Songwriters Association International (NSAI) say Spotify has already taken “more than $500 million in mechanical royalties that should have been paid to songwriters and publishers.”
The EUR-USD conversion in this article was made at the average Q3 2026 exchange rate published by the European Central Bank.Music Business Worldwide