Spotify has filed a class action lawsuit over its discontinued “Car Thing” device.

Music streaming service Spotify has been hit with a class-action lawsuit over its discontinued Car Thing device.

The lawsuit, filed Tuesday (May 28) in the U.S. District Court for the Southern District of New York, alleged that Spotify misled consumers by selling a product they knew would become obsolete.

Spotify’s, launched in 2021 and made available in the US the following year The car case has been described as “a smart Spotify player that will fill your car with music, news, entertainment, calls and more.”

However, Spotify has announced that it will discontinue Car Thing in July 2022 due to factors including pricing, inflationary pressures, and supply chain difficulties.

“We tested several price points first and honestly, we didn’t see the volume at higher prices that would make the current product financially viable” – Spotify CFO Paweł Vogel he said then.

“Second, rising inflation and component costs, combined with the increased lead times needed to order parts, have significantly changed the risk/reward balance of continuing to focus on further product development,” the executive added.

“The goal of our Car Thing US exploration was to learn more about how people listen in the car. In July 2022, we announced that we would cease further production and it was time to say goodbye to the devices completely.”

Spotify spokesperson

The company recently confirmed that existing devices will stop working completely by December 9, 2024.

A Spotify spokesperson said in a statement to: Ars Technica on Friday (May 24): “The goal of our Car Thing USA exploration was to learn more about how people listen in the car. In July 2022, we announced that we would cease further production and it was time to say goodbye to the devices completely.”

In response to this latest decision, many consumers who purchased Car Thing hardware, a voice-controlled dashboard tablet, sued Spotify, alleging that the company misled consumers by selling a product they knew would become obsolete.

In a complaint filed Tuesday (May 28) in the U.S. District Court for the Southern District of New York, the plaintiffs alleged that Spotify “failed to disclose and actively concealed its intention to discontinue product service and/or its ability to externally discontinue use of the products” and that the company used “fraud, deceptive acts or practices, fraud, misrepresentation or concealment” in connection with the sale of Car Thing.

They argued that consumers who purchased the device “were left with nothing but a paperweight costing between $50 and $100.”

Buyers “would not have purchased Car Thing if they had known that Spotify would stop supporting the product within just a few months or years of purchase,” the plaintiffs said in the complaint, which can be read in full here.

Buyers “would not have purchased Car Thing if they knew Spotify would stop supporting the product within just a few months or years of purchase.”

Class action lawsuit against Spotify

The lawsuit, filed on behalf of multiple plaintiffs, seeks unspecified damages for all Car Thing buyers.

The case is the latest legal challenge for Spotify amid the streaming giant’s ongoing dispute over its move to bundled subscription services in the US. In early March, Spotify decided to reclassify its Premium Individual, Duo, and Family subscription streaming plans as bundled subscription offers, as these plans now provide access to audiobooks.

The Mechanical Licensing Collective (MLC)organization created under Music Modernization Act of 2018 issuing blanket mechanical licenses for qualified streaming services in the U.S., sued Spotify in early May on the grounds that Spotify allegedly undercuts royalties to songwriters and publishers by bundling its services.

Additionally, National Music Publishers Association (NMPA) issued a cease and desist letter to Spotify on behalf of NMPA members for allegedly posting unlicensed lyrics on its platform.

Most recently last week, amid the ongoing dispute with Spotify, the NMPA called on Congress to make changes to U.S. copyright law that would give U.S. music publishers the freedom to choose how to license their music on music streaming services. Payments to owners of rights to works are governed by the Phonorecords IV agreement.

“Large foreign-owned companies like Spotify should not enjoy an unfair advantage over American songwriters because of outdated federal policies. By making one simple change, Congress can correct a more than 100-year-old compulsory licensing error and ensure that songwriters and music creators continue to benefit from their creative efforts,” he said. David Israelitepresident and CEO of NMPA.

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