Spotify begins divesting from France in reaction to new tax on music streaming services

 Spotify begins divesting from France in reaction to new tax on music streaming services

Spotify

Spotify has announced its withdrawal of support for two music festivals as a form of protest against a controversial new tax aimed at music-streaming platforms operating in France. The tax, expected to range between 1.5% and 1.75%, is intended to benefit the Centre National de la Musique (CNM), established in 2020 to support the French music sector.

Antoine Monin, Spotify’s managing director for France and Benelux, criticized the tax in a recent statement, expressing the company’s opposition alongside other major platforms like Apple, Google’s YouTube, and Deezer. Following the tax announcement, Spotify described it as detrimental to innovation and hinted at upcoming actions.

As part of its response, Spotify will withdraw its support from the Francofolies de la Rochelle and the Printemps de Bourges festivals, starting in 2024. These festivals have received financial backing and other support from Spotify. Monin hinted at further actions in 2024, though specific details were not provided.

Initially, Spotify suggested that the tax would result in double payments to rights holders for the same tracks, leading to its potential withdrawal from the country. However, after the government assured that music-streaming platforms would not bear additional costs due to the law, Spotify reversed its stance.

Despite the challenges posed by the tax, France remains a significant market for Spotify. Monin indicated that the company’s strategy may involve reallocating resources to other markets rather than completely exiting France, emphasizing the need for an environment that fosters innovation and investment.

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