Spotify’s Discovery Mode Accused of Payola in New Lawsuit

Spotify is facing a new wave of legal challenges, this time accusing its popular Discovery Mode feature of operating as a “modern form of payola.” This latest class-action lawsuit, filed in New York on November 5, 2025, alleges that the tool functions as a deceptive “pay-for-play” system, allowing record labels and artists to secretly pay for promotion while misleading users about the authenticity of music recommendations.

Accusations of Deceptive Practices

The lawsuit claims that Spotify “exploits that trust by marketing itself as a platform that offers organic music recommendations… only to secretly sell those recommendations to the highest bidder.” This practice allegedly misleads users who believe the platform’s algorithms and curated playlists are based solely on their listening habits.

Genevieve Capolongo, a Spotify subscriber, is spearheading the class-action lawsuit on behalf of millions of users. Her attorneys argue that despite years of using Spotify’s personalization features, she consistently heard major-label tracks that didn’t align with her listening preferences, suggesting commercial influence.

Transparency and Disclosure Concerns

The core of the lawsuit centers on how clearly Spotify discloses the mechanics of Discovery Mode. Introduced in 2020, this feature allows artists and labels to boost the visibility of their tracks in exchange for reduced royalty rates. While Spotify provides an “About Recommendations” link, Capolongo’s legal team contends that this explanation is insufficient.

“Telling users that ‘commercial considerations may influence’ recommendations does not reveal which songs are being promoted commercially and which are being recommended organically,” the lawyers stated. “Without that specificity, users cannot distinguish between genuine personalization and covert advertising.”

Broader Legal Landscape

This lawsuit adds to a growing list of legal challenges against Spotify and major labels regarding streaming practices. Just days prior, Spotify faced a lawsuit concerning allegedly inflated Drake streams. Furthermore, a high-profile 2024 case involving Kendrick Lamar’s “Not Like Us” accused Universal Music Group of using bots and payments to artificially boost song popularity across platforms, including Spotify. Another recent lawsuit alleges Spotify has ignored fraudulent streams used to inflate artists’ numbers.

Spotify’s Response

Spotify has publicly refuted the claims in Capolongo’s lawsuit, calling them “nonsense” and highlighting inaccuracies. The company clarified that Discovery Mode is a feature enabling artists to flag priority tracks for algorithmic consideration in specific contexts like Radio, Autoplay, and certain Mixes. Spotify insists it “doesn’t buy plays, it doesn’t affect editorial playlists, and it’s clearly disclosed in the app and on our website.”