On November 4, 2025, Spotify subscriber Genevieve Capolongo filed a 39-page class action complaint in Manhattan federal court alleging Spotify engages in "a modern form of payola" through its Discovery Mode feature, launched in 2020. The complaint alleges Spotify lets artists and labels pay for algorithmic boost (via reduced royalty rates) on Discovery Mode, Release Radar, Discover Weekly, AI DJ, and other editorial playlists — while marketing those recommendations to users as "organic" and "personalized."
The lawsuit seeks class-action status for at least 100 members and more than $5 million in damages exclusive of costs and interest. It brings claims for deceptive practices and false advertising, and asks the court to order Spotify to stop paid playlist placement arrangements or to disclose when songs are influenced by promotions.
Capolongo's complaint argues: "Spotify's 'Discovery Mode' and purportedly organic curated playlists represent the latest form of payola in the industry's long history of deceptive pay-for-play. Unlike the DJs and promoters of old, Spotify charges listeners for the privilege of being deceived — $11.99 per month for an individual plan."
🚨 April 22, 2026 — Texas AG Probe: Texas Attorney General Ken Paxton launched an "alleged payola schemes" probe targeting Spotify, Apple Music, and other major streamers — investigating whether they accept "bribes" to "artificially promote certain songs, artists, or content... including record labels or artists paying to be included in certain editorial or algorithmic playlists and song suggestions."
Spotify has called the class action "nonsense" but the company is now defending itself on two fronts — a private class action in SDNY and a state AG probe in Texas. The complaint notably references Drake's UMG defamation lawsuit, where he criticized his label for taking reduced royalties in exchange for increased plays on "Not Like Us."
- 01Discovery Mode lets labels and artists reduce their royalty rates in exchange for algorithmic visibility on Spotify's playlists — a pay-for-play arrangement that's not disclosed to listeners.
- 02Spotify markets playlists like Release Radar, Discover Weekly, the AI DJ, and editorial playlists as "personalized" and "made just for you" — burying any disclosure that "commercial considerations may influence" recommendations.
- 03Subscribers pay $11.99/month for individual plans, and the complaint argues they are being charged for deception — paying for neutrality they don't get.
- 04The scheme circumvents historical bribery and promotional regulations that have clamped down on payola since the radio era.
- 05Deceptive practices and false advertising under state consumer protection laws.
- 06Seeks injunctive relief requiring Spotify to either stop paid playlist arrangements or disclose them when they influence a recommendation.
This case could reshape how streaming platforms disclose promotional relationships with labels. The music industry has been dealing with payola accusations for a century, but Discovery Mode is the first digital-era mechanism openly marketed to labels as a way to boost visibility in exchange for lower royalties. If Capolongo's class is certified, every paying Spotify subscriber in the proposed class could be eligible for damages. The Texas AG probe adds regulatory pressure separate from the private litigation. Notably, Drake flagged Discovery Mode in his own UMG case — tying this payola fight into the biggest music industry legal story of 2025–2026.