Tidal has served a legal notice to its previous owners, the Norwegian media company Schibsted ASA, accusing them of inflating the streaming service's subscription numbers prior to its sale.
"It became clear after taking control of Tidal and conducting our own audit that the total number of subscribers was actually well below the 540,000 reported to us by the prior owners," Tidal said in a statement. "As a result, we have now served legal notice to parties involved in the sale."
Schibsted, however, refuted the claims, with spokesman Anders Rikter telling Bloomberg, "We disagree with the accusations in the letter and any potential claims. We would like to point out that the company was listed on the stock exchange with everything that entails regarding transparent financial reporting."
Jay Z's holding company S. Carter Enterprises LLC agreed to buy the maker of Tidal, Aspiro AB, from Schibsted in January 2015. The streaming service relaunched in March that same year with a star-studded event, but drew heavy criticism for positioning itself as an artist-owned service that benefited all musicians when its key investors were top artists like Beyoncé, Madonna, Kanye West, Jack White and Rihanna.
Since its shaky start, Tidal has grown steadily and recently announced that it had surpassed three million paid subscribers. That tally, however, still lags far behind Spotify (over 30 million) and Apple Music (over 11 million).