Spotify Faces “Payola” Lawsuit Over Discovery Mode: What You Need to Know

Spotify’s Discovery Mode is under fire with a new lawsuit accusing the streaming giant of “modern payola” through its playlist practices.

When Playlists Spark a Payola Controversy

Ever stumbled upon a Spotify playlist and wondered how certain songs seem to take the spotlight? Well, it turns out that question is at the heart of a freshly filed lawsuit shaking the streaming scene. A Spotify subscriber, Genevieve Capolongo, has raised allegations that Spotify’s Discovery Mode—a feature meant to personalize playlists—is actually a veiled form of payola.

This class-action suit, filed in Manhattan on November 4, 2025, claims that Spotify’s Discovery Mode “sells” song placements by offering reduced royalties to rights-holders in exchange for boosting specific tracks in personalized recommendations. The accusation? This practice is misleading users, masquerading as organic discovery while secretly prioritizing paid promotion.

The suit draws parallels to the infamous payola scandals of the 1950s and 1960s, where hidden payments were made to radio stations to sway which songs got airtime. The complaint bluntly states:

“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.”

This is a big deal because payola has long been frowned upon as it distorts the authentic music discovery experience and the fair compensation system for artists.

What Is Discovery Mode, Really?

If you’re scratching your head wondering what this “Discovery Mode” is, here’s the lowdown. Introduced in 2020, Discovery Mode allows artists and labels to flag certain tracks as “priority” for Spotify’s algorithmically generated playlists, like Radio, Autoplay, and Mixes. This means those tracks get a nudge to appear more often in listeners’ personalized feeds.

But here’s the twist rumored in the lawsuit: Spotify allegedly offers this “boost” in exchange for artists and labels accepting lower royalty payments on those tracks. Essentially, it’s like paying for a better spot on the menu—but with less cash back per play.

The lawsuit insists that Spotify markets itself as a platform offering natural, organic music recommendations, but behind the scenes, it’s exploiting subscribers by “selling” those recommendations.

Spotify Pushes Back Hard

Spotify didn’t sit quietly. In an exclusive response, the company called the lawsuit “nonsense,” challenging the accuracy of the claims and defending how Discovery Mode functions.

Spotify representatives explained:

• Discovery Mode isn’t used in all algorithmic playlists, particularly not in popular ones like Discover Weekly or DJ.
• The claim that it only benefits major label artists is “wrong,” with many independent artists reportedly embracing and appreciating the program.
• They emphasized the lawsuit contains several misunderstandings and factual errors about how the feature operates.

This pushback is notable because it highlights how complex and opaque streaming algorithms are, even to insiders.

The Broader Music Industry Context

This lawsuit isn’t the only legal drama Spotify is juggling. Just this week, another lawsuit surfaced alleging that Spotify ignored “mass-scale fraudulent streaming” inflating the number of streams for superstar Drake. Again, Spotify denied benefiting from this, framing artificial streaming as a broader industry challenge.

With such controversies piling up, the tension between streaming platforms, artists, and listeners feels more palpable than ever. One thing is clear: the way music is discovered and monetized is under intense scrutiny.

Why This Matters to You, the Listener

If you’re like me—a devoted music fan who thrives on the thrill of discovering fresh sounds—this lawsuit hits close to home. It raises questions about how authentic those “new favorite” tracks really are when your playlists might be influenced by hidden commercial deals.

It also shines a light on an ongoing struggle: balancing fair pay for artists with genuine discovery for fans. Streaming platforms like Spotify have revolutionized music access, but the behind-the-scenes mechanics remain a murky world.

Looking Ahead: Transparency and Trust in Streaming

The lawsuit seeks class-action status for at least 100 members, aiming for over $5 million in damages, plus an injunction forcing Spotify to disclose any commercial arrangements influencing recommendations. If successful, this could set a precedent pushing for more transparency in how streaming platforms curate your daily playlist.

For now, fans and artists alike watch closely—hoping that the future of music discovery stays true to its promise: unfiltered, organic, and fair.

In the Words of the United Musicians and Allied Workers

“There’s a new lawsuit against Spotify alleging pay-to-play promotion with their Discovery Mode tool. We need transparency from streaming services and an end to payola – we need the Living Wage for Musicians Act!”
— United Musicians and Allied Workers (@UMAW_)

FAQ

• What exactly is Spotify’s Discovery Mode?
  It’s a feature where artists and labels can label certain tracks to be prioritized in algorithm-driven playlists like Radio and Autoplay, potentially increasing exposure.
• Why is Discovery Mode controversial?
  The lawsuit alleges it acts like payola by allowing tracks to be “boosted” in exchange for reduced artist royalties, which could mislead listeners about organic music discovery.
• Does Discovery Mode affect all Spotify playlists?
  No, Spotify says Discovery Mode is not used in all algorithmic playlists and specifically excludes popular ones like Discover Weekly.
• Who benefits from Discovery Mode?
  Spotify claims that both major and independent artists use the feature, with many independents reportedly praising it.
• What could change if this lawsuit succeeds?
  Spotify might have to disclose when commercial deals influence playlist recommendations, increasing transparency for users.

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