Spotify is being accused of reviving the music industry’s oldest scandal—pay-for-play—in a sweeping new class-action lawsuit filed Tuesday (November 4) in Manhattan federal court.

The 39-page complaint, brought by New York subscriber Genevieve Capolongo, alleges that the streaming giant secretly sells visibility on its playlists through its “Discovery Mode” program and other undisclosed promotional deals, deceiving paying users who believe they’re receiving personalized recommendations.

Capolongo’s suit argues that Spotify “charges listeners for the privilege of being deceived,” alleging the platform’s touted personalization features are tainted by undisclosed commercial influence from record labels willing to accept reduced royalties in exchange for boosted placement.

Filed by Faruqi & Faruqi LLP and Stephan Zouras LLC, the case portrays Spotify’s curation system as a digital echo of radio’s historic payola scandals, stretching back to the 1930s.

The complaint states that Discovery Mode allows artists and labels to “pay” with lower per-stream rates for improved algorithmic exposure, without disclosing that financial incentives influence the content they hear.

“Spotify exploits that trust by marketing itself as a platform that offers organic music recommendations … only to secretly sell those recommendations to the highest bidder,” the lawsuit states.

Capolongo contends that she subscribed believing playlists like “Discover Weekly” and the AI-driven “DJ” were tailored to her tastes, only to realize that mainstream acts such as Drake and Justin Bieber continued to dominate her feed.

“Despite knowing that Spotify’s representations about personalization were false, [Capolongo] continues to suffer ongoing harm each time she uses the platform. She still cannot discern which songs are recommended for legitimate editorial or personalized reasons and which are promoted due to undisclosed commercial arrangements. As a result, [Capolongo] remains deprived of the ability to make informed choices about the music she listens to and pays for, and she continues to be exposed to Spotify’s deceptive conduct on a recurring basis,” Capolongo’s lawyer Innessa M. Huot explained.

She seeks restitution, punitive damages and a court order requiring Spotify to disclose when money or royalty discounts shape recommendations.

The filing accuses Spotify of violating New York’s false advertising and deceptive practices statutes, as well as of unjust enrichment. It also claims the company’s undisclosed promotional tactics breach Federal Trade Commission endorsement guidelines, likening playlist inclusion to an unmarked ad.

Spotify has not yet responded publicly to the complaint.

The new lawsuit lands just days after another major class-action was filed by West Coast rap veteran RBX, who accuses Spotify of ignoring billions of “fraudulent” or bot-generated streams that allegedly inflated superstar numbers, particularly those tied to Drake, while shrinking royalty payouts for smaller artists.

As AllHipHop previously reported, RBX’s complaint alleges that Spotify’s failure to police artificial streams has “cost legitimate performers millions” by distorting the pool of available royalties. Spotify denied wrongdoing in that case, insisting it “in no way benefits from the industry-wide challenge of artificial streaming.”

With two separate federal class actions filed in a single week, one concerning hidden playlist payments and another alleging streaming fraud, the world’s largest music platform faces mounting legal scrutiny over how its algorithms, payouts, and partnerships influence what millions of listeners hear.

Spotify has responded after West Coast Hip-Hop veteran RBX accused the platform of enabling billions of artificial Drake streams in a class-action lawsuit that claims smaller artists lost hundreds of millions of dollars due to manipulated numbers.

RBX filed the 28-page complaint in Los Angeles federal court on November 2, alleging that Spotify knowingly allowed fraudulent streaming activity to inflate the numbers of superstar artists, including Drake, while harming independent musicians.

The suit claims that “a substantial, non-trivial percentage” of Drake’s streams were fake, including more than 250,000 plays of one track traced to Turkey and rerouted through VPNs in the United Kingdom.

Spotify responded on Monday (November 3) with a statement denying any benefit from artificial streaming.

“We cannot comment on pending litigation. However, Spotify in no way benefits from the industry-wide challenge of artificial streaming,” a company spokesperson said. “We heavily invest in always-improving, best-in-class systems to combat it and safeguard artist payouts with strong protections like removing fake streams, withholding royalties, and charging penalties.”

The lawsuit does not name Drake, Universal Music Group or any third-party marketing firms as defendants. Instead, it focuses solely on Spotify’s alleged role in facilitating a system that inflates stream counts to attract advertisers and boost platform engagement.

According to the filing, some Spotify accounts streamed Drake’s music nearly “23 hours a day,” with less than 2% of listeners accounting for 15% of his total streams.

The suit claims these patterns point to bot activity, which RBX argues distorts the royalty pool and leads to unfair payouts.

Spotify defended its anti-fraud efforts by citing a 2022 case involving producer Michael Smith, who was indicted for stealing $10 million from various streaming platforms.

“Our systems are working,” the company said. “In a case from last year, one bad actor was indicted for stealing $10 million from streaming services, only $60,000 of which came from Spotify, proving how effective we are at limiting the impact of artificial streaming on our platform.”

RBX, known for his early work with Death Row Records and collaborations with Dr. Dre and Snoop Dogg, filed the lawsuit on behalf of all artists who may have been shortchanged due to alleged streaming manipulation.

Spotify has not yet filed a formal legal response, but its statement signals a clear intent to contest the claims in court.