SiriusXM is facing a class-action lawsuit that claims the company is raking in billions in revenue by charging a misleading “royalty fee” to consumers' bills.
In a complaint filed last week in federal court, attorneys for four aggrieved subscribers allege that SiriusXM adds a “US Music Fee” — allegedly 21.4 percent of the actual advertised price — to the regular price users pay. for satellite radio programs.
“This action challenges a deceptive pricing scheme whereby SiriusXM falsely advertises its music plans at lower prices than it actually charges,” the users' lawyers write. “SiriusXM intentionally does not disclose the Fee to its subscribers. SiriusXM even goes so far as to not mention the words 'US Music Royalty Fee' in any of its advertising, including the fine print.”
The lawsuit alleges that the royalty fee is a “fabricated” fee that SiriusXM has labeled “misleading” to falsely suggest that it is authorized by the government to pay for music royalties. In fact, the lawsuit says, it's really a “disguised double charge for the music plan itself” that no other competing music service charges their users.
“Reasonable consumers would expect that the advertised price for SiriusXM's music plans would include the basic cost of obtaining the licenses necessary to provide the music content that SiriusXM has promised to include in those plans,” the subscribers' lawyers say.
According to the lawsuit, SiriusXM has profited enormously from the “illegal advertising scheme” since it was implemented in 2009, alleging that it collected $1.36 billion from such fees in 2023 alone. In the states of Washington and Florida alone – the locations where the plaintiffs live – the suit alleges that Sirius has collected $932 million in royalties since the class was created.
And, according to the complaint, SiriusXM allegedly goes to great lengths to ensure that consumers never find out: “SiriusXM's registration process, auto-renewal process, and policy of not sending monthly or ongoing billing notices or invoices are deliberately designed to prevent subscribers from learning the US Music fee.”
Those allegations echo those of the New York attorney general, who sued SiriusXM in December over claims 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 people” who allegedly paid the royalty fee after seeing a lower price advertised.
“To be clear, the plaintiffs do not seek to regulate the existence or amount of the US Music Fee,” lawyers for the subscribers wrote. “Rather, the plaintiffs want SiriusXM to include the [fee] in the prices of the music project that it advertises to the general public”.
A SiriusXM representative did not immediately return a request for comment Thursday.
Read the full lawsuit here:
from our partners at https://www.billboard.com/pro/siriusxm-lawsuit-deceptive-royalty-fees-bills-billions/
