Vulture released an article called “The Streaming Problem: How Spammers, Superstars, and Tech Giants Gamed the Music Industry” where they accuse Spotify of “allegedly paying producers to create fake artists whose music can rack up plays without costing the company any more than what they paid up front.”
The article included the allegation that, “This upfront payment saves the company from writing fat streaming checks that come with that plum playlist placement, but tricks listeners into thinking the artists actually exist and limits the opportunities for real music-makers to make money.”
Spotify told Billboard via email:
“We do not and have never created ‘fake’ artists and put them on Spotify playlists. Categorically untrue, full stop,” a Spotify spokesperson wrote in an email. “We pay royalties — sound and publishing — for all tracks on Spotify, and for everything we playlist. We do not own rights, we’re not a label, all our music is licensed from rightsholders and we pay them — we don’t pay ourselves.
“As we grow there will always be people who try to game the system. We have a team in place to constantly monitor the service to flag any activity that could be seen as fraudulent or misleading to our users.”
The Vulture article is a good one and is worth a read. It’s lengthy, but worth it. You can read it here.