SiriusXM Facing Lawsuit Over ‘Deceptive’ Royalty Fee That Allegedly Earned Billions
Written by djfrosty on June 27, 2024
SiriusXM is facing a class action lawsuit that claims the company has been earning billions in revenue by tacking a deceptive “royalty fee” onto consumers’ bills.
In a complaint filed last week in federal court, attorneys for four aggrieved subscribers claim that SiriusXM adds a “U.S. Music Royalty Fee” – allegedly 21.4 percent of the actual advertised price – onto the normal price that users pay for satellite radio plans.
“This action challenges a deceptive pricing scheme whereby SiriusXM falsely advertises its music plans at lower prices than it actually charges,” attorneys for the users write. “SiriusXM intentionally does not disclose the Fee to its subscribers. SiriusXM even goes so far as to not mention the words ‘U.S. Music Royalty Fee’ in any of its advertising, including in the fine print.”
The lawsuit claims the royalty fee is an “invented” charge that SiriusXM has “deceptively” labeled to falsely suggest that it’s mandated by the government to pay for music rights. In reality, the lawsuit says, it’s a really just a “disguised double-charge for the music plan itself” that no other competing music services imposes on their users.
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“Reasonable consumers would expect that the advertised price for SiriusXM’s music plans would include the fundamental costs of obtaining the permissions necessary to provide the music content that SiriusXM has promised is included in those plans,” lawyers for the subscribers say.
According to the lawsuit, SiriusXM has reaped huge benefits from the “unlawful advertising scheme” since it was implemented in 2009, allegedly collecting $1.36 billion in such royalty fees in 2023 alone. In just in the states of Washington and Florida — the locations where the plaintiffs live — the lawsuit claims Sirius has collected $932 million in royalty fees since the charge was created.
And, according to the complaint, SiriusXM allegedly tries its best to ensure that consumers never find out: “SiriusXM’s sign-up process, automatic renewal process, and policy of not sending monthly or ongoing billing notices or invoices are deliberately designed to prevent subscribers from learning of the U.S. Music Royalty Fee.”
Those allegations echo claims made by New York’s attorney general, who sued SiriusXM in December over claims that the company made it “extremely difficult” for listeners to cancel their subscriptions. In a statement at the time, SiriusXM called those claims “baseless allegations” that “grossly mischaracterize” its customer service practices.
The new lawsuit was filed in the form of a proposed class action, aimed at eventually representing “millions of individuals” who have allegedly paid the royalty fee after seeing a lower price advertised.
“To be clear, plaintiffs are not seeking to regulate the existence or amount of the U.S. Music Royalty Fee,” lawyers for the subscribers wrote. “Rather, plaintiffs want SiriusXM to include the [fee] in the music plan prices it advertises to the general public.”
A representative for SiriusXM did not immediately return a request for comment on Thursday.
Read the entire lawsuit here: