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Jay Z's Tidal hit with $5 million lawsuit

The Tidal launch event and Jay Z
Kevin Mazur | Getty Images; Getty Images
The Tidal launch event and Jay Z

Things are looking stormy for Jay Z's music streaming service, Tidal.

The company was hit with a $5 million lawsuit last week from Yesh Music Publishing and John Emanuele of duo The American Dollar.

The lawsuit, which seeks class-action status, alleges that Tidal licensed 118 songs by American Dollar without permission and without payment and deliberately miscalculated the number of streams of the band's songs by tens of millions.

"TIDAL is up to date on all royalties for the rights to the music stated in Yesh Music LLC and John Emanuele's claim, and they are misinformed as to who, if anyone, owes royalty payments to them," the company said in a statement. "The entire catalogue in question streamed fewer than 13,000 times on TIDAL and its predecessor over the past year."

Tidal notes that it has removed all music associated with Yesh Music and Emanuele.

Representatives from Yesh Music did not immediately respond to CNBC's request for comment.

The streaming platform, which originally went by Wimp and relaunched as Tidal in 2015, made waves last year after Jay Z pledged to pay all artists, writers and producers a 75 percent royalty rate.

This is not the first issue that the company has faced since its launch. Tidal's executive team has remained in flux, with three different CEOs taking the helm in less than a year and the replacement of its chief investment officer and senior vice president of artist and label relations, according to Billboard.

The lawsuit against Tidal comes just weeks after the troubled release of Kanye West's newest album "The Life of Pablo." Within days of its exclusive release on the Tidal platform, the album had been pirated more than half a million times.

The Grammy Award-winning showman said that the "Pablo" album would not appear on Apple Music or iTunes, and he has claimed that he will not sell it to collectors, as Wu-Tang Clan did with an album it sold to embattled pharmaceutical executive Martin Shkreli.

The limited availability of the album angered some of West's fans, who have refused to sign up for Tidal's monthly subscription service. Membership costs range from $9.99 to $19.99 per month.