Oops: Spotify started in Germany without key license

Updated: Remember how we’ve been telling you that Spotify had been delaying its move into Germany because local music licensing is complicated and expensive? Well, the startup apparently thought it was so complicated that it simply launched its service for Germans without a contract with rights holders group GEMA.
GEMA President Harald Heker said during the association’s annual press conference that negotiations with Spotify are still ongoing, with a final meeting scheduled for March 26.
“I’m pretty optimistic that we will find common ground,” he was quoted as saying by the German IT news site Netzwelt.de. However, Heker also clarified: “We don’t have a contract with Spotify, which means we also don’t have a preliminary agreement.”
Spotify acknowledged that fact by telling local press that it continues to negotiate with GEMA.
To be fair, this isn’t the first time that a music service launched in Germany without settling all the details with GEMA. Many years ago, Universal Music launched its own download service — dubbed Popfile — in the country without any contract with the rights holders group. But being at odds with GEMA can also lead to lots of trouble: Negotiations between the group and YouTube (s GOOG) over licenses for music videos broke down two years ago, and numerous music videos have been blocked in Germany ever since.
It’s unlikely that things will escalate to that level between GEMA and Spotify. Heker told press this week that Spotify has demonstrated it is willing to play by the rules, according to Netzwelt. However, the exact interpretation of those rules could decide how long Germans will be able to enjoy those free plays on Spotify: GEMA’s standard rates call for payments of up to 0.006 Euro per song played – an expensive proposition for any music service that offers up songs for free.
Update: Spotify got back to us with this statement: “Spotify offers a legal service in Germany. We are in ongoing discussions with GEMA to formalise a long-term agreement. We are paying composers and lyricists in Germany, just as we pay composers and lyricists in all other countries in which we operate.”