Spotify Stole Trade Secrets to Develop Its Ad Platform, Lawsuit Claims

“This is a case about a big business stealing from a small business,” lawsuit filed on behalf of VoxTonePRO says

Last Updated: April 30, 2020 @ 12:19 PM

Spotify has been accused of stealing trade secrets from VoxTonePRO, a Canadian company specializing in online audio branding, in a lawsuit filed Thursday.

“This is a case about a big business stealing from a small business,” the lawsuit, filed in U.S. District Court in Delaware, said.

The lawsuit claims Spotify copied VoxTonePRO’s platform allowing advertisers to make affordable audio spots. The two companies had a number of meetings between 2016 and 2017, the lawsuit said, and that Spotify suggested a partnership between the two companies could be in the works, if they have access to VoxTonePROs technology. Spotify later dropped its talks with VoxTonePRO in May 2017 and launched Spotify Ad Studio, its automated platform for creating cheap ads, later that year.

“Before [Spotify] had meetings with VoxTonePro, Spotify had no system for self-service voiceover ad creation,” the lawsuit said. “But after several meetings with VoxTonePRO — during which it learned details of VoxTonePRO’s platform and led VoxTonePRO to believe that a partnership was coming — Spotify scrambled to launch a platform just like VoxTonePro’s. Having gotten what it wanted from VoxTonePRO, Spotify brushed VoxTonePRO aside.”

Spotify did not immediately respond to TheWrap’s request for comment.

VoxTonePRO is seeking an unspecified amount in damages; the lawsuit claims the company is “entitled to recover compensatory damages, including opportunity costs and exemplary damages in an amount to be proven at trial.”

The lawsuit claims approximately 30% of Spotify’s total ad revenue by mid-2019 stemmed from trade secrets stolen from VoxTonePRO.

Earlier this week, Spotify reported revenue of about $2 billion for the first quarter. The streaming heavyweight now has 130 million paying customers, following Q1.

Pamela Chelin contributed to this report. 

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