The submitted article doesn't mention it but my guess at connecting the dots is that it's related to EU Article 13's stringent requirement of "upload filters"[0]. Yes, Spotify's direct uploading "gave opportunity for small artists to share their talent" -- but that same mechanism also made it too easy to upload copyright infringing content. Since Spotify does not have a machine learning AI copyright filter like Youtu…
I think that's unlikely. If I am not mistaken, the EU directive will not be implemented for another two years.
Is there another plausible reason for Spotify shutting down direct uploads that's unrelated to copyrights?