Court Imposes Harsher Sentence on Danish Individual Found Guilty of Streaming Fraud

Court Increases Sentence for Streaming Fraud

The high court of Western Denmark increased the sentence of a 54-year-old man convicted of organizing one of the largest streaming schemes, raising his prison term to 24 months.

In March last year, a resident of East Uutland was found guilty of fraud with data and copyright violations after using bots to artificially inflate the number of streams on 689 tracks that he uploaded to streaming services, including Apple Music, Spotify, and Yousee Musik.

At that time, the court ordered the confiscation of DKK 2 million (276,000 US dollars) from the defendant and imposed an additional DKK 200,000 ($27,600) in penalties.

Details of the Scam and Reactions

Recently, after an appeal, the Supreme Court of the Western Court increased the verdict, stating, “there is evidence of extensive fraud, no less than DKK 3.5 million” which was supposed to go to the artists, according to Danish alliance of rights.

The scheme involved the release of altered versions of music originally created by Danish musicians under his own name.

“We consider it deeply regrettable that applications for compensation for owners of rights are not included in the case.”

Maria Fredenef, Alliance on Rights of Rights

From the two-year sentence, the convicted individual will serve three months for “fraud with aggravating data and copyright violations.” The court also imposed significant financial penalties, including the confiscation of DKK 1.5 million from the defendant personally and DKK 2 million from his company. Additionally, the company faces a fine of DKK 300,000.

Maria Fredenef, General Manager of Rights Alliance, which initially reported this case in 2018 on behalf of various organizations in the music industry, welcomed the increase in the sentence but expressed concern regarding the issue of compensation.

Impact on the Music Industry

“The decision also sends a decisive signal that such actions will be punished. At the same time, we consider it deeply regrettable that statements about the remuneration of the owners of rights are not included in the case. This leads to unnecessary consumption of resources for owners of rights, the convicted individual, and the judicial system.

“Given that this case has already been delayed since our initial report in 2018, it now must proceed in civil court. If even such a high-profile case, which has impacted the entire Danish music industry, does not yield compensation, we fear that in practice obtaining restitution is not a viable opportunity for rights owners.”

The case has garnered attention from key figures in the Danish music industry. Gorm of Arilds, CEO of COLLECTION SOCIETY Code, described the decision as “an important step in the fight against fraud and manipulation in the music industry,” while IFPI Communication Director Lass Lindholm stated that the verdict represents “decisive support for those who devote their lives to creating music for all of us to enjoy.”

Developments come as streaming manipulations grow increasingly complex, especially with the rise of AI in music production. In July, music data tracking company Betdapp Software reported that stream fraud costs artists approximately 2 billion dollars in royalties each year, redistributing funds to owners of low-quality content designed to siphon money from streaming revenues.

Bitdapp also collaborated with Tuned Global in October to combat streaming fraud in music applications.

In the United States, a musician from North Carolina faced charges for allegedly generating 10 million dollars in fraudulent fees using “hundreds of thousands of songs” and bot accounts.

Estimates suggest that over 1 million manipulated tracks exist on major streaming platforms such as Spotify, Apple Music, and Amazon, according to Peak copyright analysis. Some of these tracks have amassed millions of streams.

The music industry has initiated measures to combat stream fraud. In July, the distributor company and music service Entertain launched a function called “Stream Checking,” which allows artists to determine if their streams are artificially inflated due to fraud.

In October, MBW reported that TikTok’s decision to halt negotiations with Merlin was partly driven by “fears” surrounding streaming fraud.

“This is not about bad blood with Merlin. By making direct transactions, we can resolve any type of content issues directly. It’s that simple,” Ole Obermann, Global Music Development Manager and IP at TikTok stated.