Sony Music Entertainment filed a lawsuit against Napster, over $9.2 million in unsettled licensing fees and royalties. The lawsuit also seeks up to $36 million in damages for alleged copyright infringement.
Sony claims Napster stopped making royalty payments for over a year while still streaming music from Sony’s catalog. The dispute began earlier this year when Rhapsody International was acquired by Web3 startup Infinite Reality for $207 million in March. At the time of the sale, Rhapsody reportedly owed Sony and its subsidiaries more than $6.5 million.
The acquisition triggered a clause in Napster’s licensing agreements with Sony that would have allowed Sony to terminate the contracts. Instead, Sony agreed to keep the deals active on one condition: Rhapsody had to follow a four-part payment plan, with the first three installments due within two months. However, Sony claims Rhapsody failed to make any of the required payments while still collecting subscription fees from its users.
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In May, Sony sent Rhapsody a letter stating the company was in breach of contract. By June, Sony officially ended its licensing agreements with Napster. Despite this, Napster allegedly continued to stream Sony’s music, which the lawsuit calls “willful infringement.” Sony is now seeking $150,000 per infringed work—a total of $36 million based on the 240 songs listed in the court filing.
This isn’t the first time Sony has taken legal action over unpaid royalties. In 2022, the company sued video app Triller for similar reasons. Triller later admitted liability and paid $4.5 million to settle the case. Napster, meanwhile, has faced multiple accusations of late royalty payments. According to Billboard, at least six other distributors and record labels have complained about unpaid fees, and SoundExchange has also sued Napster over the issue.