EU Urges Legislation for Enhanced Algorithmic Transparency in Music Streaming Services

The European Parliament is advocating for new regulations aimed at enhancing fairness and transparency in music streaming across the continent. Key proposals include a bill requiring streaming platforms to disclose the functioning of their recommendation algorithms and to specify when songs are generated by artificial intelligence (AI).

Today, members of the European Parliament (MEPs) voted overwhelmingly in favor of a resolution—532 to 61, with 33 abstentions—marking a significant step toward potential changes in the music-streaming landscape. This initiative seeks to ensure that European artists gain better visibility and representation on music platforms, echoing similar actions taken in countries like Canada, which recently enacted the Online Streaming Act to support local talent. Although specific measures are not finalized, the legislation may establish quotas for European artists' music.

Furthermore, the proposed EU bill could require streaming services to enhance transparency regarding their algorithms and recommendation systems. This change aims to combat unfair practices that could undermine artists’ earnings, particularly in an era where AI-generated music is becoming increasingly prevalent. Europe may require platforms to clearly label such music, following the precedent set by France's Deezer.

Revenue Distribution

The European Parliament's plans also emphasize fairer revenue distribution among all contributors to music recordings—not just the primary artists. This aligns with ongoing initiatives in Uruguay, where a new law promises equitable remuneration for all performers in streamed works. However, Spotify raised concerns that the law could compel them to pay rights holders twice for the same tracks, leading the company to reconsider its operations in Uruguay. Ultimately, Spotify reversed its decision after the government assured that additional costs wouldn't be burdensome for the platforms.

Similarly, France recently implemented a new tax, ranging from 1.5% to 1.75%, on music-streaming services to support its domestic music sector. In response, Spotify announced plans to reduce its investment in France, including withdrawing support for two music festivals.

The European Parliament's latest initiative addresses widespread issues of revenue imbalance in music streaming, which often leaves many authors and performers with minimal compensation.

Spanish MEP Iban García del Blanco emphasized that the Parliament is amplifying the voices of European creators: “Cultural diversity and fair compensation for authors have been our priorities. We advocate for regulations that ensure transparency in algorithms and AI usage in music streaming, putting European artists front and center.”

In contrast, Digital Music Europe—a trade association representing streaming giants like Spotify, Deezer, and SoundCloud—argued against the Parliament’s findings. They maintain that music streaming significantly benefits the industry and fosters diversity. Olivia Regnier, chair of Digital Music Europe and Spotify’s senior director for European policy, stated, “The flourishing popularity of music streaming stems from consumer choice and discovery. European fans consistently support local music. Therefore, we urge policymakers to conduct thorough research into the diversity and success of music streaming before pursuing these regulatory measures.”