{"id":38400,"date":"2025-10-13T16:55:01","date_gmt":"2025-10-13T16:55:01","guid":{"rendered":"https:\/\/publicknowledge.org\/?p=38400"},"modified":"2025-10-13T17:43:59","modified_gmt":"2025-10-13T17:43:59","slug":"drake-umg-lawsuit","status":"publish","type":"post","link":"https:\/\/publicknowledge.org\/drake-umg-lawsuit\/","title":{"rendered":"Drake v. UMG: Fearless Whistleblower or Bitter Loser?"},"content":{"rendered":"\n

Last week, Judge Jeannette A. Vargas of the U.S. District Court for the Southern District of New York moved to dismiss<\/a> the defamation lawsuit from hip hop artist Drake against his record label UMG Recordings, Inc., finding that \u201cthe allegedly defamatory statements in \u2018Not Like Us\u2019 are nonactionable opinion.\u201d<\/p>\n\n\n\n

To recap, for those who might be just tuning in: Back in March 2024, a years-long simmering feud between Drake and fellow artist Kendrick Lamar spilled over into public view with the release of Lamar\u2019s verse on Future and Metro Boomin\u2019s \u201cLike That.\u201d After a stretch of diss tracks<\/a>, celebrity weigh-ins<\/a>, and headline-grabbing public performances<\/a> in the months that followed, things took a turn when Billboard reported in late November<\/a> that Drake was filing a lawsuit against his record label UMG, to which Lamar is also signed. And by April 2025, the final text of that suit<\/a> had arrived \u2013 with Drake accusing the media giant of flexing its industry power to defame Drake as a pedophile in its work to promote, and failure to prevent, the release of Lamar\u2019s chart-topping track “Not Like Us.”<\/p>\n\n\n\n

Now that the judge has dismissed the lawsuit, it\u2019s unlikely that this case will make it to trial. But while much attention has been focused on the filing of the lawsuit itself being rather unusual for a rap beef, some of the claims being made as to how <\/em>UMG allegedly defamed Drake echo what we already know about the shady \u2013 and sometimes illegal \u2013 practices of the music industry when it comes to promoting and licensing music on streaming services. Let\u2019s take a look.<\/p>\n\n\n\n

The Claim: UMG Uses Bots to Promote Its Music<\/strong><\/h4>\n\n\n\n

One of the major claims that Drake\u2019s filing accuses UMG of is of the usage of bots. Bots are software programs that can be used to mimic human behavior, especially in order to increase engagement for content posted on digital platforms. Drake accuses UMG of paying third-party sources for bots \u201cto artificially inflate the spread\u201d of “Not Like Us” on Spotify \u2013 boosting the streaming numbers in order to secure spots on Spotify’s top playlists, and in turn receive more visibility to garner even more streams, saves, playlisting, and purchases from real users.<\/p>\n\n\n\n

What We Know: Bots are a Widespread Issue<\/strong><\/h4>\n\n\n\n

The usage of bots on streaming services is nothing new, having plagued the industry for over a decade<\/a>. One of the most common uses is through streaming farms<\/a>, which are organized networks of bots that play songs and playlists on loop. Various third party services offering access to streaming farms have emerged over the years, marketing themselves to upcoming independent artists hoping to boost their streaming numbers for playlist placement and label attention. Though platforms like Spotify have rolled out increasingly advanced measures<\/a> for detecting and discouraging botted content, usage continues to proliferate \u2013 with some experts estimating that at least 10%<\/a> of all streams are fake.<\/p>\n\n\n\n

But while industry attention<\/a> seems to be primarily focused on discouraging botting from small actors, some signs indicate that even major acts have been getting their hands dirty. In 2021, Rolling Stone published an expos\u00e9 on a leaked phone call<\/a> between members of management and distribution company the Blueprint Group and a digital marketer named Joshua Mack. During the call, the two parties discuss options for inflating the streams of American rapper G-Eazy for his upcoming album release. As he markets his services, Mack boasts that his \u201cnetwork\u201d can create \u201c200 million streams a month\u201d for his clients \u2013 a group which allegedly includes multiple well-known artists and record labels. He even goes so far as to admit that Spotify is aware of and has punished him for his activities in the past \u2013 but that doesn\u2019t stop him. \u201cWe cracked the code, and understand how to manipulate the system and hit astronomical numbers,\u201d he claims.<\/p>\n\n\n\n

There is a long and storied history<\/a> of artists and record labels paying to boost numbers and manipulate the music charts, in what is generally understood as payola<\/a> \u2013 an industry practice that has changed over time to accommodate new mediums of distributing and consuming music, even as the basic dynamic, \u201cpay to play,\u201d remains the same. In the early days of the music business, record labels would approach radio DJs offering cash, gifts, and even mortgage payments to play their artists\u2019 songs on the radio. This practice eventually came to political prominence in 1960 in what became known as the \u201cPayola scandal<\/a>,\u201d which was accompanied by a series of highly publicized Congressional hearings. In the wake of this (and thanks to Federal Trade Commission scrutiny), record labels shifted from paying radio stations directly for radio play, to instead paying third-party promoters<\/a> who would then \u201cencourage\u201d radio program directors to add certain songs.<\/p>\n\n\n\n

With the present day\u2019s rise of bot farms, however, leaks such as the call with the Blueprint Group suggest that payola has transformed once again, and other sources from within the industry<\/a> seem to confirm the existence of widespread adoption. In an interview with Rolling Stone, an artists and repertoire executive<\/a> (A&R) from a major music label admitted, \u201cThere are a few third-party companies out there running this for a lot of the major companies. We use them too for some of our artists. We agree to a certain amount of money for a certain amount of streams, and we can spread that out among [our] artists. It\u2019s like, we\u2019re good; we just need performance-enhancing steroids to be a little bit better.\u201d<\/p>\n\n\n\n

The Claim: UMG Charges Spotify Lower Rates in Exchange for Recommendations<\/strong><\/h4>\n\n\n\n

A second major claim in Drake\u2019s filing focuses on licensing rates. This refers to the agreed upon compensation that streaming services pay in exchange for holding the rights to reproduce, distribute, and allow users to listen to songs on their platforms. The filing claims that UMG charged Spotify \u201clower than usual\u201d monetary licensing rates for “Not Like Us” in exchange for increased promotion of the record, including through recommending the song to users during search.<\/p>\n\n\n\n

What We Know: Non-Cash Compensation is King<\/strong><\/h4>\n\n\n\n

When it comes to licensing deals, non-cash compensation hits a sweet spot. Streaming services typically pay out advances to major labels based on expectations of royalty earnings from the label\u2019s catalog, which can reach sums in the tens of millions of dollars \u2013 providing a guaranteed income amount for the label in question. In theory, streaming services could recoup that amount if the label\u2019s catalog generates enough revenue within the advance\u2019s covered time period \u2013 usually a year \u2013 but if this doesn\u2019t happen, the labels still keep the advance amount in full (commonly referred to as \u201cbreakage\u201d). While this sets up a win for the record labels either way, these advances take money off of the table<\/a> for less powerfully-positioned licensors such as independent labels and artists. In addition, these advances can cause streaming services to pay out significantly more than its intended revenue share due to large advance commitments, as shown in previous Spotify financial filings<\/a> that saw the streaming service paying out up to 82% of its revenue in rights payments compared to a target 70%.<\/p>\n\n\n\n

Non-cash compensation helps to lighten the load. Labels have leveraged their catalogs within licensing deals to secure payment in the form of equity stakes<\/a>, discounts on advertising space<\/a>, increased algorithmic recommendations<\/a>, and even spots on popular playlists<\/a>. Taken together, these forms of compensation may very well be seen as yet another form of payola, in which rightsholders charge lower licensing rates in exchange for increased play and promotional visibility \u2013 just as the suit alleges happened with \u201cNot Like Us.\u201d Researchers have found that songs from major label catalogs<\/a> not only \u201cfeature on popular Spotify playlists at a disproportionately higher rate\u201d than their indie counterparts (a disparity that, apparently due to focused efforts from Spotify, has recently begun to shrink<\/a>), but are also \u201cover-represented\u201d in the song recommendation process.

While this exchange undoubtedly benefits the streaming services in question by reducing their licensing payment liability (Spotify, for all its nearly two decades of existence, only reported its first profitable year in 2024<\/a>), these moves also carry on the legacy<\/a> of some of the shadier practices of the music industry by shrinking the amount of compensation that labels have to pass along to their artists. And with the cloud of secrecy within the music industry thanks to pervasive non-disclosure agreements (NDA), many artists and their teams remain completely in the dark<\/a> on the payment details of the licensing deals negotiated on their behalf. <\/p>\n\n\n\n

Okay, So\u2026 Now What?<\/strong><\/h4>\n\n\n\n

Whether or not you find Drake to be a fearless whistleblower of the music industry or a bitter loser in a rap beef, the problems with payola in streaming services are very real. And a lawsuit alone isn’t likely to fix these issues. Many of the known details of licensing deals have been brought to light due to leaks, given the aforementioned brick wall of NDAs \u2013 and previous attempts to hold the music industry accountable for payola by Congress and the Federal Communications Commission have failed to fully rein in the practice. But there is one agency that might be uniquely equipped for the challenge: the Federal Trade Commission.

Under Section 6(b) of the FTC Act, the FTC has authority to conduct a wide-ranging study<\/a> to figure out exactly what’s going behind major label closed doors. This includes allowing for the FTC to pierce NDAs, and even compelling labels to make publicly available annual accounting of all non-cash compensation in licensing deals, so that artists, consumers, and lawmakers alike can ensure the streaming industry remains accountable<\/a>. Public Knowledge has previously advocated<\/a> for the Commission to open a 6(b) study, but we are still waiting for the agency to take action.<\/p>\n\n\n\n

But in the meantime, however, we\u2019ll be dancing to \u201cwop, wop, wop\u201d with the best of them.<\/p>\n","protected":false},"excerpt":{"rendered":"

Drake’s lawsuit may be over, but the music industry’s problems with payola continue.<\/p>\n","protected":false},"author":211,"featured_media":37018,"parent":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":true,"footnotes":""},"categories":[5],"tags":[14],"class_list":["post-38400","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-insights","tag-platform-regulation"],"acf":[],"yoast_head":"\nDrake v. 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