Michael H. Joseph has secured a significant ruling for artists, digital platforms, and the future of digital music distribution. A federal judge in the Southern District of New York has allowed recording artist Marc Mysterio to move forward with a breach of contract claim against Amazon arising from an alleged “shadowban” on Amazon Music.
In a March 13, 2026 opinion, Judge Katherine Polk Failla granted in part and denied in part Amazon’s motion to dismiss, holding that Mysterio’s breach of contract claim against Amazon may proceed. The court separately granted DistroKid’s motion to dismiss the one claim it challenged.
Marcel Albert, who records and performs as Marc Mysterio, distributes his music through DistroKid, which in turn delivers content to streaming platforms including Amazon Music. In or around August 2023, Mysterio opted to make his catalog exclusive to Amazon Music through the DistroKid portal.
Case Background: Amazon Shadowban Lawsuit
According to the complaint, after September 10, 2024, Amazon implemented a “shadowban” that effectively removed Marc Mysterio’s music from the platform’s algorithmic and curated ecosystem, including artist stations, Alexa requests, recommendations, and other discovery pathways. Mysterio alleges that Amazon cited metadata and ISRC coding irregularities as justification, but that this rationale was pretextual because Amazon’s own Audio Fingerprinting technology automatically detects and corrects precisely those kinds of metadata inconsistencies.
Amazon disputed these characterizations. At the motion-to-dismiss stage, the court was required to accept the complaint’s well-pleaded allegations as true. The ruling does not mean Mysterio has proven a shadowban occurred. It means the court found his contract theory plausible enough to proceed into discovery.
The Third-Party Beneficiary Holding
The threshold question was whether Mysterio, who is not a party to the DistroKid-Amazon distribution agreement, could sue Amazon under it at all. Amazon argued he could not, citing the absence of privity and pointing to the agreement’s non-assignment, merger, and notice provisions as indicators that no third-party enforcement was intended.
The court disagreed, finding two provisions particularly significant. First, the DistroKid-Amazon agreement repeatedly references that artists like Mysterio will be “due” royalties under it. Second, and more importantly, the agreement’s indemnity provision expressly acknowledges that third parties may bring claims against Amazon for actions Amazon takes under the contract, with DistroKid agreeing to indemnify Amazon in that event. The court read that provision as an explicit recognition that artists like Mysterio might sue, which cut strongly in favor of intended beneficiary status.
The court also pointed to surrounding circumstances. Because DistroKid agreed to pass 100% of the royalties it receives from Amazon directly to Mysterio, DistroKid itself has no financial stake in whether Amazon pays. By structuring the arrangement that way, DistroKid effectively transferred its entire economic interest in Amazon’s performance to Mysterio. This is a strong indicator, the court found, of intent to make him a direct beneficiary.
Under New York law, the relevant inquiry focuses on the intent of the promisee, in this case DistroKid, to confer the benefit of Amazon’s promised performance on the third party. The court found that intent adequately pleaded.
The Good Faith and Fair Dealing Holding
Having found that Mysterio could enforce the agreement, the court turned to whether he had adequately alleged a breach. Mysterio conceded that Amazon violated no express term. The agreement explicitly gave Amazon the right to stop distributing music at any time, for any reason, with no obligation to continue. Amazon argued that this foreclosed any good faith claim as well.
The court rejected that argument. Even where a contract gives a party broad discretion, the implied covenant of good faith and fair dealing requires that discretion to be exercised in good faith. The court found that Mysterio had stated a viable, but narrow claim: specifically, that Amazon invoked ISRC coding problems as a pretext for the shadowban while possessing technology that would have automatically corrected those very problems. As the court noted in a footnote, discovery will focus specifically on Amazon’s reasoning for the alleged suppression.
What Was Dismissed in the Shadowban Case?
The ruling was not a complete win for Mysterio. The court dismissed his claims against Amazon for quasi-contract, tortious interference with prospective business relations, violation of New York Civil Rights Law §§ 50-51, and standalone injunctive relief.
On the tortious interference claim, the court found that Mysterio had adequately alleged a business relationship with his listeners, but had not plausibly alleged that Amazon acted with malice or wrongful means: a required element under New York law. His allegation that a rival musician or label had induced the shadowban was made “upon information and belief” with no supporting facts, no identified parties, and no explanation, and the court declined to credit it.
On the Civil Rights Law claim, the court found that Mysterio had granted Amazon a perpetual, irrevocable license to use his name, image, and likeness in connection with Amazon Music services, and that the alleged shadowban did not automatically terminate that consent.
As for DistroKid, it only moved to dismiss the negligence claim against it. The court granted that motion, holding that any duty DistroKid owed Mysterio arose from their contract, not independently, and New York law requires an independent duty to support a tort claim. The breach of contract and accounting claims against DistroKid, which DistroKid did not challenge, proceed.
What Happens Next?
Defendants must file their answers by April 17, 2026. The parties are required to submit a joint case management plan by May 8, 2026, positioning the case to move into discovery. Given the court’s framing, that discovery will center on Amazon’s internal reasoning for the alleged suppression and whether the ISRC justification was, as Mysterio alleges, pretextual.
Why This Case Is Worth Watching
Two legal questions give this case significance beyond the parties themselves.
First, the third-party beneficiary holding, if it survives further proceedings, has implications for how independent artists can enforce rights under distributor-platform agreements. The court’s reasoning, particularly its focus on who ultimately bears the economic risk of nonperformance, could inform how those agreements are drafted and disputed going forward.
Second, the implied covenant analysis puts a concrete legal question to courts that streaming platforms have largely avoided: does a platform’s contractual right to remove content insulate it from scrutiny over how and why that decision is made? The court’s answer at this stage is no; at least not completely.
Neither question is settled, but the case now has the procedural footing to develop real answers. New York trial attorney Michael H. Joseph represents Marc Mysterio in this matter.
