Kanye West, Jay Z’s S. Carter Enterprises, and Tidal have managed to settle the $84 million class action lawsuit they have been facing for the past two and a half years. As of Tuesday, Justin Baker-Rhett, who filed suit against the rappers and the subscription streaming service in April 2016, citing fraud and violations of federal advertising laws, filed to voluntarily dismiss the case, suggesting that the parties settled their differences out of court.
Baker-Rhett filed suit in 2016 alleging that West and Tidal “fraudulently induced consumers to subscribe to Tidal” under the guise that West's “The Life of Pablo” album would exclusively be available on that platform. According to Baker-Rhett’s complaint, West promised fans in a February 2016 tweet that his album would only be available on Tidal, the service that rapper and music mogul Jay Z acquired in 2015. As a result, “consumers were uniformly tricked into handing over their private data and credit card information by a singular mistruth.”
“Contrary to Mr. West’s representations,” the complaint further alleged, “the purportedly ‘exclusive’ access to The Life of Pablo that Tidal subscribers were promised was short lived. A month and a half after The Life of Pablo’s initial release, Mr. West made the album available through Tidal’s biggest competitors, Apple Music and Spotify. He also began selling the album through his own online marketplace.”
To make matters worse, Baker-Rhett argued that neither West nor Tidal “ever intended for ‘The Life of Pablo’ to run exclusively on the Tidal platform.” Instead, he claimed that they made such a warranty – which amounted to “deceptive marketing” – “knowing that Tidal was in trouble but not wanting to invest their own money to save the company” and thereby “fraudulently induced millions of American consumers into paying for Tidal’s rescue.” And it worked, the suit claimed that Tidal's subscriber base tripled from 1 million to 3 million in the 6 weeks following West's tweet.
While the parties appear to have come to a confidential agreement to make the suit go away (and likely to prevent West and co. from having to ultimately submit to depositions), Tidal is not necessarily in the clear. Less than a year after news reports that Tidal might be on the hook for fraud due to the “intentional inflation of user play counts” on its platform, Norway's National Authority for Investigation and Prosecution of Economic and Environmental Crime confirmed an official investigation into the subscription-based music streaming service.
Tidal first raised red flags in Norway, where its service is headquartered, after revealing the play counts for Kanye West and Beyoncé’s respective "The Life of Pablo" and Beyoncé's "Lemonade" albums. Kanye West’s “The Life of Pablo” album "had been streamed 250 million times in its first 10 days of release in February of 2016,” according to Tidal’s metrics, whereas Beyoncé’s “Lemonade” was streamed a whopping 306 million times in its first 15 days of release in April of 2016.
The problem? The numbers for the two highly-anticipated albums, both of which debuted exclusively on Tidal in 2016, did not necessarily add up, according to law enforcement officials and members of the media, as Tidal was said to have just 3 million subscribers at the time. Upon closer inspection, Tidal was accused of boosting the streams of the albums by Kanye and Beyoncé – who are both “artist owners” of Tidal, according to the company’s website – by “320 million false plays of songs … a manipulation that affected more than 1.7 million users.”
As Norweigan publication Dagens Naeringsliv stated last spring, “User accounts and play counts obtained by [Dagens Naeringsliv] revealed suspicious listening patterns, such as simultaneous playbacks of multiple songs by the same user or repeated playbacks of the same song at regular intervals.”
Now, Norwegian authorities have begun a formal investigation into such claims of manipulation. To date, “At least four former Tidal employees (including its former head of business intelligence) have been interrogated in front of a judge [for a total of 25 hours] as part of the investigation.” Tidal’s counsel said in a statement earlier this month that the company “is not a suspect at this time nor has there been charges filed [against it].”