Negotiations started in May after a group of employees and three of Sweden’s trade unions approached Spotify with a request to set up a collective agreement for its staff.

But on Wednesday startup news site Breakit was first to report that Spotify had pulled out of talks with the unions.

“While we have a lot of respect for collective bargaining agreements and the Swedish model, our employment conditions and benefits are already just as good or better than what is stipulated in a collective bargaining agreement and our plan remains to keep offering our employees first-rate wages and benefits,” a Spotify spokesperson told Breakit in a statement.

Camilla Frankelius, head of negotiations for the Engineers of Sweden union, said she regretted that the company had walked out, adding that the union’s aim was still to pursue a collective agreement.

“We now have to analyse what this situation means and make decisions about the path ahead to protect employees’ conditions and interests. We obviously want to continue the conversation and negotiations,” she told Breakit.

Although nine out of ten employees in Sweden are covered by a collective bargaining agreement – a key feature of the Swedish workplace model – they are less common in the startup and tech bubble.