SoundCloud is being sued by a UK performing rights organisation for not paying songwriters royalties when their music is used on the site.
The Performing Rights Society for Music (PRS) claim that the music streaming service failed to obtain the proper license to host PRS members' music on its platform and that they were initiating legal action following five years of unsuccessful negotiations.
The group insists that SoundCloud needs a "PRS for Music license" to legally stream the music of members in the UK and its failure to do so has not properly compensated PRS members for their work.
SoundCloud has had a difficult year so far after failed negotiations with Sony Music resulted in the company pulling all of its music from the service.
Here’s more on the SoundCloud brand.
SoundCloud founders Alexander Ljung and Eric Wahlforss both studied at KTH Royal Institute of Technology in Sweden. They attribute the birth of their friendship to the fact they were the only two guys in class with a Mac.
Ljung released his own album as a teenager. Reflecting on the experience he said he lost himself down a “huge rabbit hole” and that the album was “"terrible music, very, very bad music."
Warner Music has a 5 per cent stake in the business which guarantees that Warner artists are paid when their music is played on SoundCloud.
Following the artists rights problems the company launched On SoundCloud, an initiative that introduced advertising alongside music and audio in order to pay artists.
SoundCloud is worth an estimated $ 934,000,000.