A São Paulo court has issued a ruling against Seguidores Marketing Digital, ordering the company to cease providing fake followers, likes, and streams on platforms like Spotify, YouTube, TikTok, and Instagram.

The  IFPI, which represents the global recording industry, said the ruling marks the first under Operation Authentica, an initiative targeting the streaming fraud industry.

The São Paulo Public Attorney’s Office led the operation through its Consumer Protection Unit and Cyber Gaeco division, supported by industry groups APDIF and IFPI Latin America. Investigators have identified 38 local websites offering streaming fraud services.

Seguidores has been found liable for misleading advertising and consumer fraud while violating constitutional rights protections. The court has then ordered Seguidores to cease its fraudulent services, pay damages and suspend its domain names.

The company will face additional fines if it continues operations. Seguidores has filed an appeal challenging the ruling, the IFPI said.

“This is a clear warning to those profiting from manipulating the online music environment. Their actions mislead music fans and undermine legitimate artists.”

Victoria Oakley, IFPI

IFPI CEO Victoria Oakley said: “This is a clear warning to those profiting from manipulating the online music environment. Their actions mislead music fans and undermine legitimate artists.

“Today’s ruling sets a strong legal precedent, and we are grateful to the São Paulo Public Attorney’s Office for this successful operation. We will continue to work closely with authorities to tackle these fraudulent practices, and to help protect Brazil’s thriving music community.”

Paulo Rosa, President, Pro-Música Brasil, added: “The content of this ruling goes beyond the music streaming manipulation itself. It adds the defense of consumer rights to cases where artificial and inorganic means are used to boost content online.

“We applaud this decision and will continue to work closely with Brazilian authorities to protect the integrity of our legitimate music market.”

The ruling follows the launch of what Brazilian law enforcement described as the “largest-ever” operation to disrupt streaming fraud. The initiative, launched in April, targets JustAnotherPanel, a global organization that provides technical infrastructure to a large network of resellers that offer fake streams used in streaming manipulation.

“The content of this ruling goes beyond the music streaming manipulation itself. It adds the defense of consumer rights to cases where artificial and inorganic means are used to boost content online.”

Paulo Rosa, Pro-Música Brasil

At the time, the IFPI said Cyber Gaeco, the cybercrime unit of the prosecutor’s office in Sao Paulo, obtained a court order that blocked JustAnotherPanel in Brazil, and at least 43 local illegal services have been disrupted, and 1,131 resellers of streaming fraud services outside Brazil have been impacted.

The development marks the latest in the crackdown on streaming fraud in Brazil. In March, authorities in the country arrested and charged a man accused of uploading more than 400 fake tracks to Spotify, generating more than 28 million plays and earning the unnamed suspect roughly $65,000.

Authorities also alleged that the suspect had stolen 36 tracks from local composers through promotional WhatsApp groups.

Elsewhere in 2020, Brazilian authorities announced they had taken down 14 websites involved in streaming manipulation, and the following year, they announced they had shut down 10 streaming manipulation services, while another 20 stopped offering the services.

In another case in 2023, Brazilian law enforcement took down FileWarez, which IFPI described as the most popular illicit file-sharing site in the country, which at its peak counted 118,000 registered users.

In 2024, law enforcement’s Operation Redirect took down eight illegal online music services that were being used to distribute malware to users.

Authorities in Brazil have also been running an ongoing initiative called Operation 404, to take down copyright-infringing music services with the cooperation of trade groups like IFPI and Pro-Música. According to the Office of the US Trade Representative, as of September 2024, seven Operation 404 initiatives had been carried out, the most recent focusing on stream-ripping sites and apps in Brazil and Paraguay.

Music Business Worldwide

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BYD Co.’s monthly sales have stagnated of late and with the summer months being a traditionally slower time for consumer purchases, that trajectory isn’t expected to reverse any time soon. 

Discounting is also now being looked sternly upon by Beijing, with China last week pledging to rein in “irrational competition” in the electric vehicle sector, reflecting authorities’ wish to tackle the deflationary price wars that are threatening economic and industrial growth.

Some of BYD’s international forays are also proving more challenging than expected, raising the question, is China’s No. 1 automaker on shaky ground?

The Shenzhen-based behemoth currently looks like it will undershoot its annual sales target for 2025, in what would be a rare miss after a multi-year bull run. The number of electric and hybrid vehicles BYD needs to sell each month through December has hit 560,000 units, in excess of levels it could hope to achieve typically in a single month. The most vehicles BYD has ever sold in a month was just shy of 515,000, in December last year.

Analysts are now doubting whether BYD can hit 5.5 million units in 2025. Consensus estimates continue to be downgraded.

Deutsche Bank AG earlier this month said it now expects 5 million in wholesales, or deliveries to dealers, for this year, comprised of 4 million domestic units and 1 million overseas, while Morgan Stanley last month lowered its projection to 5.3 million, pointing to a smaller number of new models. Bloomberg Intelligence’s Joanne Chen says BYD will need to sacrifice some profit and maintain its hefty discounting in the second half if it wants to stay on track.

“Regulatory scrutiny will temper direct cuts to vehicle sticker prices but competition isn’t going away and retail promotions are still needed to sustain sales momentum,” she said. “New model roll outs and steady tech upgrade are also crucial.”

Bing Yuan, a fund manager at Edmond de Rothschild Asset Management, said many market watchers now realistically expect sales of around 5 million. “My sense is that is the consensus,” she said.

Stripping out overseas and commercial sales, BYD’s core car deliveries in China are shrinking. In June, they slipped 8% year-on-year as vehicles from brands like Zhejiang Geely Holding Group Co., Xpeng Inc. and Xiaomi Corp. won over buyers. HSBC Holdings Plc data show that Geely was the largest gainer of market share in the first half, while BYD was among the biggest losers.

Overseas sales are faring better and those are looking on target to reach BYD’s forecast of 800,000. Indeed, BYD is already almost 60% of the way there. But while higher margin international sales will help BYD offset aggressive domestic discounting, some foreign markets are presenting new difficulties.

BYD has grand plans for Saudi Arabia, for example, hoping to triple its footprint after Tesla Inc. entered the country. But EVs account for just over 1% of total car sales in the kingdom, with high costs, sparse charging infrastructure and extreme temperatures challenging EV adoption.

India, a potentially huge market, has meanwhile consistently blocked BYD’s efforts to expand and despite rapid growth from a low base in Europe, there are substantial tariff headwinds and increasing competition from legacy automakers that already have consumers’ trust, not to mention more extensive after-sales networks.

At home, regulatory scrutiny has also intensified around BYD as it continues to be at the fore of an EV price war. In late May, it slashed prices by as much as 34%, triggering renewed sector-wide discounts. Its moves were later discouraged in a veiled warning by the Chinese Communist Party’s mouthpiece the People’s Daily, which slammed the “rat-race competition.”

Whether Beijing can actually stop price discounting by a privately held company is a point of debate.

Tianlei Huang, a China program coordinator at the Peterson Institute for International Economics, said authorities may resort to administrative tools such as price reviews or cost investigations to establish a de facto price floor, or coordinate a concerted capacity reduction among leading EV makers, although he acknowledged those measures won’t be easy.

Regardless, BYD must be careful. As the company gears up to release first-half results later next month and July sales data within weeks, analysts will have their spreadsheets at the ready, waiting to see whether those 2025 targets look even further in the distance.