Spotify will end service in Uruguay due to bill requiring fair pay for artists

Spotify has confirmed that it will end its service in Uruguay, after the country's Parliament approved an amendment to its copyright law that would require "equitable remuneration" for artists.

A spokesperson confirmed yesterday (Monday 20) that Spotify will begin to "phase out" its service in the country from January 1, 2024 — will all operations ceasing by February.

The bill, which is titled "Rendición de Cuentas," was first introduced by Uruguayan Society of Performers (SUDEI) earlier this year, proposing to amend Articles 284 & 285 of Uruguays copyright law.

The modification, which was approved by the Uruguayan Parliament last month, is set to introduce a requirement for "fair and equitable remuneration" for artists in regards to their recorded material.

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The bill also introduces a requirement for "social networks and the Internet" to be treated as "formats for which, if a song is reproduced, the performer is entitled to financial remuneration."

The streaming giant had first threatened to end its service when the bill, titled "Rendición de Cuentas," was first tabled in July — claiming that the proposed changes "lack clarity" and “an additional mandatory payment for music services”.

In a letter sent to Uruguay's Minister of Education Pablo Da Silveira, a spokesperson for Spotify said: "If the proposed reform became law in its current form, Spotify's business in Uruguay could become unfeasible, to the detriment of Uruguayan music and its fans," claiming that the amendment would force it to "pay twice" the amount of royalties.

In its statement confirming the end to its services in Uruguay yesterday, Spotify said: “Without clarity on the changes to music copyright laws included in the 2023 Rendición de Cuentas law – confirming that any additional costs are the responsibility of rights holders – Spotify will unfortunately begin to phase out its service in Uruguay effective January 1, 2024, and fully cease service by February."

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“Spotify already pays nearly 70% of every dollar it generates from music to the record labels and publishers that own the rights for music, and represent and pay artists and songwriters," it continues.

“Any additional payments would make our business untenable. We are proud to be their largest revenue driver, having contributed more than $40B to date. And because of streaming, the music industry in Uruguay has grown 20% in 2022 alone."

Speaking to El Observador last month, SUDEI spokesperson Gabriela Pintos insisted that the organisation "was not against platforms" but instead wants royalties "to be distributed fairly."

Pintos expanded that other countries have made moves to ensure "digital reproduction" of music, and that "the legislation is not a demand for an increased contribution from streaming services" but instead "legislation that would ensure artists can negotiate a percentage that corresponds to us."

Megan Townsend is Mixmag's Deputy Editor, follow her on Twitter