SiriusXM faces class action lawsuit over “misleading” licensing fees

SiriusXM is facing a class action lawsuit alleging that the company made billions in revenue by imposing a deceptive “license fee” on consumers’ bills.

In a lawsuit filed in federal court last week, lawyers for four aggrieved subscribers claim that SiriusXM adds a “US music royalty” – allegedly 21.4 percent of the actual advertised price – to the regular price users pay for satellite radio packages.

“This lawsuit challenges a deceptive pricing system in which SiriusXM falsely advertises its music packages at lower prices than it actually charges,” the users’ lawyers wrote. “SiriusXM intentionally fails to 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 advertisements, even in the fine print.”

The lawsuit alleges that the royalty fee is a “fabricated” fee that SiriusXM “misleadingly” labeled to falsely suggest that the company is required by the government to pay for music rights. In reality, the lawsuit says, it is merely a “disguised duplicate fee for the music package itself” that no other competing music service imposes on its users.

“Reasonable consumers would expect that the advertised price for SiriusXM’s music plans would include the basic costs of obtaining the necessary approvals to provide the music content that SiriusXM promised would be included in those plans,” say the subscribers’ lawyers.

According to the lawsuit, SiriusXM has made huge profits from the “unlawful advertising scheme” since its inception in 2009, collecting $1.36 billion in royalties in 2023 alone. In the states of Washington and Florida alone – the places where the plaintiffs live – Sirius has collected $932 million in royalties since the fee was introduced, according to the lawsuit.

And according to the complaint, SiriusXM allegedly tries its best to make sure consumers never find out about it: “SiriusXM’s sign-up process, automatic renewal process, and policy of not sending monthly or ongoing billing notices or invoices are deliberately designed to prevent subscribers from learning about the U.S. music royalty fee.”

These allegations are consistent with statements by the New York Attorney General, who sued SiriusXM in December for making it “extremely difficult” for listeners to cancel their subscriptions. In a statement at the time, SiriusXM called the allegations “baseless accusations” that “grossly misrepresent” its customer service practices.

The new lawsuit was filed as a class action suit and ultimately aims to represent “millions of individuals” who allegedly paid the license fee after seeing a lower price in the advertisement.

“To be clear, plaintiffs do not seek to regulate the existence or amount of the U.S. music royalty fee,” the subscribers’ lawyers wrote. “Rather, plaintiffs want SiriusXM to include the (fee) in the prices of the music plans it promotes to the public.”

A representative for SiriusXM did not immediately respond to a request for comment Thursday.

Read the entire lawsuit here: