I do declare I thought it was a cheeky reference to those tomato plants that grown down by old railroad tracks.
You see a long time ago, someone at a tomato. Could've been a slice in a cold sandwich. Could've been a fresh one, maybe with A little cheese and pepper. But chili just won't do. Neither would spaghetti.
Then, before we had such regulations as we do today, they deposited that tomato seed, post digestion, in the train lavatory toilet. Being back then as it was, the tomato seed and associated fertilizer was dropped from the train car to the track ballast below where it germinated.
It's the same process where researchers deposit tomatoes on new volcanic islands.
You know what they say: when you gotta go, you gotta go.
For those that are arguing that this is simply a legal arbitrage, or financial engineering of some sort, I suggest reading the actual indictment. From page 4:
> at relevant times to this Indictment, a Manhattan-based music distribution company ("Distribution Company-1 ") [...] required customers, such as SMITH, to "agree not to engage in (or to permit, encourage, enlist, retain, or employ third parties to engage in) [...] any activity and/or method which involves the artificial creation, by human or non-human means, of online or offline plays on audio and/or audio-visual streaming services, where such plays do not represent bona fide end-user listening and/or views initiated by genuine consumers and taking place in the reporting country."
The issue here is not a TOS violation on the subscriber side. Smith had an obligation not to engage in streaming manipulation as an artist receiving royalty payments, and deliberately skirted that obligation (while attempting to conceal his activity) with the intent of inducing Spotify to pay him royalties which he was not legitimately owed. That's fraud.
You're overthinking this. From the indictment (page 4):
> at relevant times to this Indictment, a Manhattan-based music distribution company ("Distribution Company-1 ") [...] required customers, such as SMITH, to "agree not to engage in (or to permit, encourage, enlist, retain, or employ third parties to engage in) [...] any activity and/or method which involves the artificial creation, by human or non-human means, of online or offline plays on audio and/or audio-visual streaming services, where such plays do not represent bona fide end-user listening and/or views initiated by genuine consumers and taking place in the reporting country."
Moreover, the arbitrage available here doesn't really have anything to with "burning investor money". Aside from the fact that Spotify has been profitable so far in 2024, this fraud would be possible even if they had been profitable during the whole time the fraud had been carried out: it doesn't require that Spotify's royalty outlays be greater than their subscription/ad revenues in the aggregate. Rather, it relies on the fact that royalties are calculated in terms of total streaming volumes, but subscription prices are volume independent.
So while it's possible for a single individual to abuse the system and generate more royalties for themselves than what they pay in subscription revenues, it wouldn't work as a method in the aggregate for Spotify users to en masse produce royalties that exceeded streaming revenues. Even in unprofitable years their revenues greatly exceed their royalty payments. E.g., Spotify reportedly paid out $9B in royalties for 2023, on over $14B of revenue. At that point they were still operating at a loss due to R&D, marketing/sales, and administrative expenses, but that's all quite aside from their royalty calculation system.
What a company 'requires you to agree to' is unrelated to fraud. The issue I'm considering is whether the relevant crime is fraud.
def., Fraud, "knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his or her detriment"
For it to be fraud, they would have had to relevantly misrepresent themselves in some transaction. The question is whether their actions were misrepresentations. This is unclear.
If I upload a song to Spotify I am not promising anything wrt to who listens to it or how. If I stream a song from Spotify I'm not promising to listen to ads, or only to listen to as many songs as are profitable for Spotify. So it's unclear that any misrepresentation has been made.
Spotify is well within its rights to terminate these accounts for TOS violations, and there might be some crime in taking payments from spotify.. but this is quite unclear.
There's a real problem in saying that whatever BS a company puts in its TOS defines fraud and if you dont do that you're defrauding a company. If that's true, then you're probably defrauding companies all the time, as are many.
> The question is whether their actions were misrepresentations. This is unclear.
Accepting the facts in the indictment at face value, I really don't see how this is unclear. The contract between Smith-the-artist and Spotify was that they would pay him royalties for legitimate streams which were not the result of manipulation, and that he would not deliberately manipulate the streams.
Smith then knowingly violated these terms, attempted to conceal his violations from Spotify, and continued to accept the royalty payments to which he knew he was not entitled. Aside from the misrepresentations required to initially set up the scheme (e.g., signing up bot accounts under fake names), he also repeatedly and directly denied participating in the exact sort of scheme he knew he was perpetuating: "I have never done
anything to artificially inflate my streams". The allegations in paragraphs 26-30 cover several instances of this.
> If I upload a song to Spotify I am not promising anything wrt to who listens to it or how.
I'm not sure how you are squaring this with the quoted portion of the indictment from my prior comment. Smith did, in fact, make promises regarding who would listen (and how) to the songs he uploaded: namely, that he would not personally or via a third party listen to the songs in a manipulative manner.
> There's a real problem in saying that whatever BS a company puts in its TOS defines fraud and if you dont do that you're defrauding a company. If that's true, then you're probably defrauding companies all the time, as are many.
That's simply not the case here. Smith was not inadvertently running afoul of fine print buried deep in TOS that he never read to trivial detriment of some corporation. He was engaged in repeated and deliberate misrepresentation with the intent of inducing Spotify and distribution companies to pay out royalties in excess of $10M to which he knew he was not entitled.
Sure, so it's in the signup for the downloading accounts -- that's plausible. If those were free accounts, then I'd agree its fraud. I'm just interested in what interaction was the fraudulent one.
If those were premium accounts, then I doubt it would be fraud.
That's certainly not the only misrepresentation Smith made throughout this scheme.
I'm having trouble understanding why you think it's particularly relevant whether these were free or paid accounts (as alleged in the indictment, the fraud made substantial use of paid family plan accounts).
It's worth noting that the scheme here was not merely bilateral between Spotify and Smith--it involved multiple streaming services, multiple distribution companies, the "Rights Organizations", and financial service providers who were all part of the overall scheme of delivering unearned royalties to Smith based on fraudulent streams.
If the facts alleged in the indictment are true, it seems immensely clear to me that Smith made multiple false representations to each of these parties as part of the scheme to have them deliver streaming royalties to which he knew he was not entitled. Among those false representations were:
- false names provided on accounts for the purposes of concealing his identity
- statements to financial service providers in order to obtain debit cards in those false names
- agreement that he would refrain from engaging in manipulative streaming activity
- insistence that he was not engaging in such manipulative activity when suspicion s arose
Smith directly responded to the suspicions that arose as early as 2018, but the scheme continued for years afterwards. So even if one were to make the case that he was initially unaware of a clause buried deep in the TOS, he was made expressly aware that he was in violation of those terms and chose to continue deceiving the parties (and indeed increased his efforts to conceal the fraudulent activity from the streaming platforms).
Now, it may be the Spotify alone wouldn't have a case for damages here since his activity didn't directly cause them to pay out more total royalties, and his subscriptions increased the total pool. But this isn't a civil case where Spotify is suing for breach of contract to claw back the royalty payments; there was $10M in royalties paid out to Smith that came from somewhere which was owed to someone other than Smith. Smith lied to multiple parties involved in the music steaming business in order to induce them to make those royalty payments.
I'm no lawyer, and so don't have a great idea if there's technical elements to the charges here that will be difficult to prove beyond a reasonable doubt, but I think it's more than clear that this was not 'fair play' on the part of Smith. I am reminded of the viral 'free money glitch' that went viral several weeks ago on TikTok: people were writing fraudulent checks, depositing them at ATMs and then withdrawing the cash portion that Chase permits you to withdraw before the check has fully cleared. That the automated systems for preventing this sort of abuse were imperfect does not somehow make it not fraud.
Honestly, I feel better if an author makes their personal biases known rather than try to conceal them beneath a facially impartial analysis. It naturally invites more scrutiny on the claims being made, but IMO it’s more intellectually honest to invite that scrutiny explicitly. Those with an axe to grind about any given topic who are reasonably rhetorically capable could write an ostensibly nonpartisan account which nonetheless leads readers to the authors preferred conclusion.
Maybe it's my time on staff at a college newspaper in the early 90s. Neutral voice reporting was drilled into us pretty mercilessly.
When it is a pretty straightforward recounting of an event, just give me the facts please.
Its his own site, so understandably the editorial voice is his to do what as he wills, but again, in the end I believe it undermines his own credibility with his readership, or at least sprinkle more of the opinionated voice at the beginning so I can read it in that mindset, rather than having to recast my view on the reporting post hoc.
Yeah, I suppose I went in primed for a more opinionated style just because of the fact that I was reading an unknown author’s Substack rather than something that purported to be news. I definitely take your point about moving the partisan comments up front.
IIRC the property ‘each single digit has the same density’ is the definition for a ‘simply normal number’ (in a given base), while ‘each finite string of a particular length has the same density as all other strings of that length’ is the definition for a ‘normal number’ (in a given base). And then ‘normal in all bases’ is sometimes called ‘absolutely normal’, or just ‘normal’ without reference to a base.
But this doesn’t offer any justification for why, for locations that people highly value living in, we as a society ought to do anything other than maximize the number of people living there.
Sure, but it is an option (as well as everywhere along the spectrum up to maximization), and so ‘people want to move there’ is not on its own a justification for ‘prices must go up’.
There are many homeless people who are not living on the streets: those living in shelters, or cars, or who are frequently moving between temporary living situations with friends or family. And they may even be holding down a job, and/or relying on local support systems for, say, child care, which could make ‘move where it’s cheaper’ an untenable or very risky option.
FWIW the concurrency story has been getting substantially more attention over the past couple of years with first-class language support. Swift 6 aims to be data-race-safe by default.
Right, the SEC’s guidance[1] on this specifies that merely trading on MNPI alone is not enough:
> Illegal insider trading refers generally to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, on the basis of material, nonpublic information about the security.
If you have no fiduciary duty or other relationship of trust and confidence, it’s not insider trading. So to my understanding, if you, say, overheard two execs chatting about this in an airport lounge you’d be free to trade on it.
Note: this only applies to the US! Different countries may define things differently.
