Copyright Office Opens Inquiry Into AI-Generated Streaming Fraud

The U.S. Copyright Office published a notice in the Federal Register on October 7 calling for public comment on music streaming fraud. The inquiry asks artists, labels, streaming platforms and anyone with relevant data to explain how bot farms and AI-generated tracks are pulling money out of the royalty pool.

The notice follows a May 21 letter from Rep. Scott Fitzgerald of the House Judiciary Committee, who asked the Office to examine the scope of streaming fraud across digital platforms and its effect on the music business. The Copyright Office says responses will help inform Congress.

How Fraudsters Game the Pool

The core issue is structural. Most streaming services pool a portion of revenue and divide it by total play count, which means fraudulent streams dilute payouts to legitimate artists. The notice lists the common tactics: bot farms, click farms staffed by human workers, playlist stuffing, hijacked accounts and ghost tracking, where someone uploads a slightly altered version of another artist's song and claims it as their own. Many schemes are run through unethical marketing companies.

The financial stakes are substantial. The notice cites roughly $9.5 billion in U.S. streaming revenue for sound recordings and $22 billion globally. Music publishers brought in an estimated $7.3 billion domestically and $10 billion worldwide. Beyond direct royalty theft, fake streams distort playlist algorithms and skew the touring data artists and venues rely on.

The AI Catalyst

The inquiry focuses heavily on generative AI's role in scaling fraud. The notice references Michael Smith, a North Carolina man who uploaded hundreds of thousands of AI-generated songs, used thousands of bot accounts to stream them, and collected about $10 million in royalties before pleading guilty to conspiracy to commit wire fraud in March.

The Office quotes the congressional letter's view that there is nothing inherently wrong with using AI as a creative tool, but that generative AI lets criminals produce the massive song catalogs needed to make fraud schemes profitable. The notice also mentions Universal Music Group suing distributor DistroKid in September over what it called an AI slop pipeline, and IFPI launching a Streaming Integrity Initiative the same month.

Detection, Databases, and Policy Questions

Streaming services already use detection systems that analyze listening time, geography and the ratio of saves and follows to streams. But the Office notes that some fraudsters simply move to a new distributor once they're caught. One distributor has proposed a worldwide database of known abusers.

The notice also cites a Swedish investigative report alleging that criminal networks used fraudulent streams to launder money. David M. Israelite, President and CEO of the National Music Publishers' Association, called streaming fraud a national security issue.

The inquiry poses 10 questions covering fraud methods, economic damage, connections to AI-generated music and live performance revenue, and the effectiveness of countermeasures like trusted-distributor programs, royalty clawbacks and content removal. The Office is also asking whether the industry should move away from pro-rata payouts toward artist-centric or user-centric models, and whether policy changes like no-fault injunctive relief or stronger state-level enforcement are warranted.

Initial comments are due by 11:59 p.m. ET on November 23, 2026, with reply comments due December 21. Submissions go through regulations.gov, and instructions are posted on the Copyright Office's website.