U.S. Copyright Office Open Music Streaming Fraud Inquiry

The US Copyright Office published a notice of inquiry (NOI) in the October 7 Federal Register seeking information on streaming fraud affecting sound recording and musical-work royalties.

• It seeks commentary from labels, publishers, distributors, streaming services, and independent artists about "the prevalence of 
  streaming fraud across digital platforms and how it may be affecting the music industry as a whole".
• The notice requests possible voluntary, statutory, or regulatory solutions.
• Comments are due November 23, 2026; reply comments are due December 21, 2026.

Why it matters

This is a formal Copyright Office policy inquiry. Although it doesn't create a rule or a decision, it creates an official record on synthetic music, artificial streams, royalty allocation, and possible legislative remedies. The Office intends to reach people working in the music industry impacted by streaming fraud and compile "public comments that, together with the Office's own research, may contribute to Congress's understanding of streaming fraud, current efforts to curb this problem, and potential solutions."

The inquiry does not mention AI-training fair-use disputes. Instead, it asks a different question: What happens when someone uploads music, inflates the play counts, and collects royalties that should have gone to someone else?

What is AI Music Streaming Fraud?

AI Music Streaming Fraud is defined in the notice as "using "deceptive, inappropriate, or unpermitted methods to artificially increase the number of streams a song or album receives". This often dilutes the royalty pool for legitimately streamed works.

Notably, a Congressional Request in the NOI includes a statement establishing there's "nothing inherently wrong with using AI as a creative tool in music development, or the organic growth of AI-generated music." The concern is that generative AI can act as a catalyst for fraud because these schemes scale with the number of songs. When you can create thousands of tracks overnight, you can spread fake streams thin enough to slip past detection.

Music Industry Impacted by AI Fraud

In the October 7th notice, it quotes The Digital Media Association's estimate that ‘‘streaming [is] now driving around 70% of global sales,’’ making the stakes higher than ever. And on the Copyright Office's Music Streaming Fraud page, they specifically highlight the widespread impact of fraud enabled by AI, describing how "digital music providers, music distributors, vendors, copyright owners, performance rights organizations, collective management organizations, and law enforcement agencies" have all made attempts to address streaming fraud, "with varying degrees of success."

Want to learn more about how artificial intelligence is impacting protected works? Read: Navigating Intellectual Property Law in an AI Future

Music Streaming Fraud Litigation

One success the notice highlights is the Department of Justice's case against Michael Smith, who allegedly created thousands of bot accounts to stream hundreds of thousands of AI-generated songs he had uploaded, collecting about $10 million in royalties. According to the notice, he pleaded guilty in March 2026 to conspiracy to commit wire fraud, with sentencing set for October 2026. The indictment emphasized that the scheme needed a huge volume of songs to generate meaningful proceeds.

The notice also references Universal Music Group's 2026 lawsuit against DistroKid, which alleges the distributor helped flood platforms with "mass AI-generated, SEO-optimized, and copyright-infringing slop" presented as human-made music. Those are allegations, not findings, but their inclusion signals that the Office sees distribution practices as part of the fraud conversation.

The Future of Royalties and Music Licensing Law

The Copyright Office will review public comments generated by the notice, layer in its own research, and share what it learns with Congress. That type of report could lead to legislative recommendations, but it won't change music licensing law by itself. The popular sentiment toward regulating artificial intelligence may be the momentum that pushes AI streaming fraud legislation forward.

To learn more about harm caused by artificial intelligence, Music law or protecting your intellectual property, contact our team today.