What we think — By WATMM Desk —
Fraud fines on distributors work. Without an appeal, they also fine the innocent
What we think: The best case for per-track fraud fines is that they make distributors screen uploads, and the evidence says that works. But a fine passed down to an artist who never bought a stream is a penalty without a hearing, and the Copyright Office inquiry is the moment to ask for one.
The US Copyright Office has opened an inquiry into streaming fraud and lists the fines services now charge. The case for those fines is strong. Here it is put fairly, and where we think it falls short.
Should streaming services keep fining distributors for fake plays? Yes. But a fine is only fair when the person who ends up paying it can contest it, and right now most independent artists can't.
The news hook
On 7 October 2026 the US Copyright Office published a notice of inquiry into music streaming fraud, with comments due on 23 November 2026 (Federal Register). Among the anti-fraud tools it describes are fines: it cites a report that Apple Music's fraud fee, first set at 5% and capped at 25%, now starts at 10% and is capped at 50%, and another that Spotify charges distributors $10 per track with detected fraudulent streams (Federal Register). It also notes that some distributors make artists sign contract terms that subject them to penalties for fraud (Federal Register). One of its questions asks which industry practices "may be inadvertently contributing" to fraud (Federal Register).
The best case for fines
Put fairly, the argument goes like this.
Fraud takes money from everyone else. Royalties come out of a pool split by share of plays, so the notice calls dilution of that pool the primary harm (Federal Register). Every fake stream is paid for by real artists.
Fines put the cost where the gate is. Distributors decide who gets onto streaming services. Spotify said when it introduced its charges that it would charge labels and distributors per track when flagrant artificial streaming is detected (Spotify). A distributor that pays for fraud has a reason to stop it at upload.
It seems to work. LANDR says artificial streams flagged by Spotify on its catalogue fell 95% between Q1 2025 and Q2 2026, and it now screens releases before delivery (LANDR).
Fraudsters move around. The notice says scammers keep going by "bouncing from distributor to distributor" (Federal Register). Making every gate expensive to fool is the obvious answer.
We agree with all of that. Fines changed distributor behaviour faster than any lawsuit has.
Our answer
The fine rolls downhill. A distributor that pays the fine can pass it on to the artist under the contract terms the notice describes (Federal Register). The artist is the party with the least data and the least power.
Detection is not proof. Bots are pointed at any track a fraudster likes, including tracks by people who never paid anyone. A sliding fee of up to 50% is a big penalty to issue on a score the artist never sees. That is our reading; the notice does not report error rates for any detector, and we couldn't find any public ones.
The 95% figure says nothing about the innocent. LANDR does not disclose the base numbers, and reports nothing on false positives (LANDR). A filter that also catches honest artists can still post a great headline.
This is the "inadvertent" practice. If a fine can land on someone who did nothing, the cheapest way to sabotage a rival is to buy them bots. We think that is exactly what the Office's second question is asking about.
What we think
Keep the fines, and add due process. Our ask for the comment period: any fine passed to an artist should come with the reason and the affected tracks in writing, a set window to respond, and a refund if the distributor can't show the artist was behind it. Services already keep the signals; sharing a summary costs little. We'd change our minds if a service published false-positive rates low enough that appeals would almost never succeed. Until then, a fine without an appeal is just a tax on bad luck.
Comments close on 23 November 2026. If you've been fined for streams you didn't buy, that's the evidence the Office says it wants.
Sources
- Music Streaming Fraud: notice of inquiry, US Copyright Office, Federal Register, 7 Oct 2026, accessed 29 Oct 2026
- US Copyright Office opens music streaming fraud inquiry, AI Musicpreneur, accessed 29 Oct 2026
- LANDR Reports 95% Reduction in Artificial Streams Flagged by Spotify, LANDR, 23 Sep 2026, accessed 29 Oct 2026
- Modernizing Our Royalty System, Spotify for Artists, accessed 29 Oct 2026
Sources
- Music Streaming Fraud: notice of inquiry (Docket No. 2026-6), US Copyright Office, Federal Register (primary source). Accessed 29 Oct 2026.
- LANDR Reports 95% Reduction in Artificial Streams Flagged by Spotify, LANDR (press release) (primary source). Accessed 29 Oct 2026.
- Modernizing Our Royalty System, Spotify for Artists (primary source). Accessed 29 Oct 2026.
- US Copyright Office opens music streaming fraud inquiry, AI Musicpreneur. Accessed 29 Oct 2026.
Researched with AI assistance, written and checked by WATMM Desk.