This shouldn’t be legal. It’s a massive abuse of power. Small artists need to be on Spotify (pulling their music in protest is not viable and not going to lead to change anyway). What gives Spotify the right to arbitrarily decide “you make so little money it’s not worth our time paying you”? There’s no other business you could get away with this in. Scum.
It depends on the amount here, which I'm still not actually sure of. Lots of companies today only pay you out once you reach $X, usually some nominal amount. It sounds like that could be the case here. Why deal with payment processors, billing disputes, etc for a customer only earning pennies?
Spotify doesn’t have to deal with these things. Artists work with distributors who then deal with Spotify on their behalf. The distributor pays the artist.
For me the issue here is they’ve changed the deal to the detriment of the littlest of the little guys. A company that just signed a non-exclusive $250m deal for Joe Rogans podcast, can’t afford to pay $10 a year to a whole bunch of independent artists. That’s outrageous. For me it’s the ethics of it rather than the amount.