Every stream an underground producer gets paid for comes out of the same shrinking pie as every bot-farmed, AI-flooded fake stream nobody can quite see. The U.S. Copyright Office just opened the first real federal inquiry into how big that fake slice actually is, and it wants to hear from the industry before November 23.
The Notice of Inquiry, published in the Federal Register on October 7, 2026 under Docket No. 2026-6, asks for public input on "bot farms, click farms, playlist stuffing, account hijacking" and a practice the Office calls copyright fraud, which covers fraudulently claiming original or manipulated tracks through tactics like carbon copying or ghost tracking. Written comments close November 23, 2026 at 11:59 p.m. Eastern via regulations.gov; reply comments follow on December 21.
Why is this happening now?
The Office moved after Rep. Scott Fitzgerald (R-WI) asked it, back in May 2026, to examine the prevalence of streaming fraud across digital platforms and specifically how AI-generated streaming fraud is affecting the licensing and distribution of sound recording, performance and mechanical royalties. That is the exact three-way split that determines whether a self-released producer on Bandcamp or DistroKid sees a royalty check that reflects real listeners.
The timing is not subtle. The notice landed one day after Michael Smith, a North Carolina man, was sentenced to 18 months in prison for conspiracy to commit wire fraud. Smith used bot accounts to inflate playback numbers on hundreds of thousands of AI-generated songs he claimed to own, pulling in roughly $10 million in fraudulent streaming royalties before he got caught. That case proved the fraud is not theoretical: it is a working business model, and prosecutors had to build a wire-fraud case to stop just one operator.
The Office is asking the industry to put a number on something everyone in the scene already feels: a chunk of the royalty pool that should be funding real music is going to nobody.
What's actually at stake for underground producers?
Digital streaming is roughly 70% of global recorded-music revenue, worth close to $22 billion a year. That revenue is split among a fixed pro-rata pool on most platforms, so every fraudulent play does not just fail to pay a real artist, it actively pulls money away from one. A bot farm streaming an AI-generated track a million times takes a real, measurable bite out of the same royalty pot that pays the deep house producer whose EP sold three hundred copies on Bandcamp and streamed a few thousand times on Spotify.
The Office's framing covers the exact techniques that have been quietly reshaping independent distribution: account hijacking that diverts royalties to the wrong payee, playlist stuffing that games algorithmic placement away from real curators, and AI song floods designed purely to catch plays rather than listeners. None of that is hypothetical for anyone who has watched a DistroKid or Bandcamp dashboard and wondered why the numbers don't add up to real plays.
Who can actually comment, and does it matter?
This is a formal rulemaking-adjacent process, not a symbolic gesture. Comments filed by labels, distributors, rights organizations and individual artists through November 23 become part of the public record the Office uses to decide whether to recommend legislative or regulatory action. Independent labels and artist advocacy groups have standing to weigh in just as easily as major distributors, and a federal agency building a public evidentiary record on AI streaming fraud is rare enough that skipping the comment window would be a missed shot at shaping how royalties get protected going forward.
