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Jay Z, Kanye and Tidal are being sued and it's Kanye's fault

Daniel Roberts
Senior Writer

If you've been paying attention to news about Jay Z's streaming music service Tidal, you could have seen this coming. After Kanye West surprised fans earlier this month by releasing his album "The Life of Pablo" on every other streaming platform, a California man is taking legal action.

Chicago law firm Edelson PC has filed a class-action lawsuit on behalf of Justin Baker-Rhett, who accuses Tidal of using the promise of West's exclusive album as a way to boost membership—which is exactly what it did. It is unclear who at Tidal, including Shawn Carter (Jay Z), knew West would make the decision to fully release the album. On Feb. 15, West said on Twitter that his album "will never never never be on Apple... You can only get it on Tidal." On April 1, he suddenly offered it up everywhere, including Apple Music, Spotify, Google Play and even SoundCloud.

As Yahoo Finance wrote when West released the album on other platforms, his decision was the dark cloud in an otherwise big week of positive news for Tidal: The company shared subscription numbers, revealing that it had reached 3 million paying subscribers; it said 45% of them (about 1.4 million) pay for the higher-price $20-per-month “HiFi” version of the service; and it signed on four new artist equity owners. But West putting his album on other platforms ruined Tidal's good week, and would likely enrage anyone who had signed up for Tidal specifically because it had the West album exclusively.

Baker-Rhett's $5 million lawsuit invites other angry subscribers to join, and names S. Carter Enterprises (Jay Z's holding company) and West as the defendants, known together as Tidal for the purposes of the suit. The firm, Edelson, has filed class actions against other (much bigger) tech companies before, including Facebook (FB) and Twitter (TWTR).

Edelson's official summary of its lawsuit rails that Carter and West, "duped consumers into signing up for Tidal subscriptions."

Was West's decision a change of heart? Or did Carter and Tidal know he planned it all along? The lawsuit attempts an answer: "Neither Mr. West nor SCE ever intended 'The Life of Pablo' to run exclusively on the Tidal platform," the filing, obtained by Yahoo Finance, says. "To the contrary, they—knowing that Tidal was in trouble but not wanting to invest their own money to save the company—chose to fraudulently induce millions of American consumers into paying for Tidal's rescue."

Because the main claim of the suit is that consumers were tricked, it demands that Tidal "delete the private information" of Baker-Rhett and any other subscribers who decide to join his class action suit, and that Tidal "cease any monetization efforts relying on the illegally obtained information."

Interestingly, the lawsuit filing focuses a great deal on West's Twitter following and some other accomplishments, such as appearing twice on a Time Magazine list. "Mr. West has developed a robust and devout fan base, with nearly 22 million Twitter followers (although he himself only follows one person) and tweets that are often widely reported on by the popular media," the lawsuit states. The filing includes photographs of tweets by Tidal promoting the "Life of Pablo" exclusivity.

Tidal has been in the news often since its launch, mostly for negative reasons. Most recently, the service filed its own lawsuit, against Aspiro, the Swedish tech company from which Carter acquired Tidal. Carter is also suing Schibsted Media Group and Verdane Capital, Aspiro's biggest shareholders. Separately, there have been rumors reported of a potential Samsung acquisition of Tidal.

Tidal did not immediately reply to a request for comment, and Carter, who has often taken to Twitter to sound off on Tidal news and milestones, has not tweeted about the lawsuit.

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Daniel Roberts is a writer at Yahoo Finance, covering sports business and technology.  

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