Copyright Office Opens Inquiry Into Music Streaming Fraud and Royalties

The U.S. Copyright Office, an agency of the Library of Congress, has opened a notice of inquiry into music streaming fraud and its impact on royalties for sound recordings and musical works, acting on a congressional request. The notice, docketed as Docket No. 2026–6, was published in the Federal Register of Wednesday, October 7, 2026 (Vol. 91, No. 193, Notices), under document FR Doc. 2026–20537. Written comments must be received no later than 11:59 p.m. Eastern Time on November 23, 2026.

The proceeding responds to a letter from Representative Scott Fitzgerald of the Committee on the Judiciary to Shira Perlmutter, Register of Copyrights and Director of the U.S. Copyright Office, dated May 21, 2026. The congressional request asked the Office to “examine the prevalence of streaming fraud across digital platforms and how it may be affecting the music industry as a whole.” The notice, signed on October 5, 2026 by Emily L. Chapuis, General Counsel and Associate Register of Copyrights, sets out background on the problem and solicits public input that, together with the Office’s own research, may inform Congress.

A market built on streaming

The Digital Media Association estimates that streaming is now driving around 70% of global sales. For sound recording copyright owners such as record labels, streaming-specific revenues stand at approximately $9.5 billion domestically and $22 billion globally; total revenue for musical work copyright owners such as music publishers is reported at roughly $7.3 billion domestically and $10 billion globally.

Streaming services commonly pay rights owners from royalty pools funded by a percentage of their revenue, and under the prevailing “pro-rata” system the more a song is played, the more its rightsholders receive. The Office warns that this structure can incentivize bad actors to inflate plays artificially, diverting money from rights owners of legitimately streamed works.

How the fraud operates

The notice defines streaming fraud as the illegitimate practice of using deceptive, inappropriate or unpermitted methods to artificially increase the number of streams a song or album receives. Reported techniques include:

• bot farms and click farms;
• playlist stuffing;
• account hijacking;
• other methods of user manipulation, frequently carried out by unethical marketing companies.

The Office states that the primary harm is dilution of the royalty revenue pool, with secondary effects on where songs are placed in playlists and algorithmic queues, on the data artists and venues use for business decisions such as touring, and on the likelihood of fans discovering lesser-known artists.

Enforcement and industry responses

Law enforcement has already acted. The U.S. Department of Justice indicted Michael Smith in North Carolina on charges of wire fraud, conspiracy to commit wire fraud and conspiracy to commit money laundering; he created thousands of “bot” accounts, used them to stream his own uploaded songs and fraudulently collected some $10 million in royalties. He pleaded guilty in March 2026 to one count of conspiracy to commit wire fraud, with sentencing scheduled for October 2026 before Judge John G. Koeltl (No. 24–cr–504, S.D.N.Y.). Abroad, a Danish man was sentenced to prison and fined for artificially inflating stream counts, and a Swedish report found crime networks using false streams to launder money.

Industry efforts cited in the notice include the Music Fights Fraud Alliance, launched in 2023, and the IFPI’s “Streaming Integrity Initiative” announced in September 2026. Distributors have bolstered identity verification, created “Trust and Safety” departments and adopted “know your customer” protocols, while platforms have imposed fines on uploaders of artificially streamed songs.

What the Office asks

The notice poses ten subjects of inquiry, covering how streaming fraud is executed; industry policies or practices that may inadvertently contribute to it; current and projected economic impacts; links to AI-generated music and licensing royalties; effects on live performance, ticket and secondary sales; the effectiveness of countermeasures; the use of ownership and usage data; potential voluntary, statutory or regulatory solutions; criminal enforcement; and any additional recommendations for Congress.

Reply comments must be received no later than 11:59 p.m. Eastern Time on December 21, 2026. Submissions are made through regulations.gov, with specific instructions posted on the Office’s music streaming fraud page; Rhea Efthimiadis, Assistant to the General Counsel, is the contact for further information.

The inquiry matters to everyone earning from recorded music: artists, songwriters, labels, publishers, distributors and streaming platforms all stand to be affected by how the Office frames the problem and what remedies it recommends to Congress. Because royalty pools are finite, every dollar extracted through fraud is a dollar withheld from legitimate creators.

Source: Federal Register, Vol. 91, No. 193, October 7, 2026, Notices, p. 64188 (official reference: FR Doc. 2026–20537).