united-states internet music communications-law
Does Payola apply to Spotify and related services?
<p>If someone paid a Playlist Curator to host music on the curator's playlist, <em>without any disclosure of the payment</em>, would that be illegal?</p>
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<p><a href="https://www.law.cornell.edu/uscode/text/47/508" rel="nofollow noreferrer">US Title 47 Section 508</a> states this kind of behavior is illegal for <em>commercial radio broadcasts</em>:</p>
<blockquote>
<p>(a) Subject to subsection (d), <strong>any employee of a radio station who accepts or agrees to accept from any person</strong> (other than such station), or any person (other than such station) who pays or agrees to pay such employee, <strong>any money</strong>, service or other valuable consideration for the broadcast of any matter over such station <strong>shall, in advance of such broadcast, disclose the fact of such acceptance or agreement to such station.</strong></p>
<p>(g) Any person who violates any provision of this section shall, for each such violation, be fined not more than $10,000 or imprisoned not more than one year, or both.</p>
</blockquote>
<p>Are there any laws like this pertaining to services such as Spotify?</p>

<p>The main question is whether <a href="https://www.law.cornell.edu/uscode/text/47/508" rel="nofollow noreferrer">47 USC 508</a> could apply to Spotify in such a case, since there is no other law that would prohibit promoting a product for money. The law applies to a &quot;radio station&quot; which is defined in terms of radio transmission of energy, but &quot;radio&quot; is itself not legally defined. Conventionally understood, Spotify is not a radio station, and it does not broadcast (which is defined in terms of &quot;radio communication&quot;). For example, no FCC license is required for Spotify to operate, whereas actual radio stations must have an FCC license.</p>
<p>Para (a-c) impose requirements for the payer and payee to disclose to the employee's station (or employee's employer, depending on paragraph). Were Spotify to become a radio station, you would be required to report a payment to Spotify just in case the curator is an employee of Spotify. &quot;Payola&quot; is a somewhat broader part of <a href="https://www.congress.gov/86/statute/STATUTE-74/STATUTE-74-Pg889.pdf" rel="nofollow noreferrer">Public Law 86-752</a>, which also includes <a href="https://www.law.cornell.edu/uscode/text/47/317" rel="nofollow noreferrer">§317</a>, requiring paid announcements to be announced as being paid (a requirement imposed on the station).</p>

<p><a href="https://www.law.cornell.edu/uscode/text/47/508" rel="nofollow noreferrer">47 USC 508</a> only applies to radio broadcasts, which would not include Spotify, etc.</p>
<p>But there are a host of other laws governing deceptive marketing and unfair trade practices that could apply to an online payola scheme. For instance, the FTC has gone after many large businesses for <a href="https://www.ftc.gov/news-events/news/press-releases/2021/10/ftc-puts-hundreds-businesses-notice-about-fake-reviews-other-misleading-endorsements" rel="nofollow noreferrer">&quot;failing to disclose an unexpected material connection with an endorser.&quot;</a> If we can treat Spotify playing or promoting a song as an endorsement of that song, it seems the FTC might want to go after a label that paid for those plays.</p>
