Spotify end user agreement
Is ripping streamed music illegal?
It's gray area. Stream (like Spotify)/radio ripping is nothing new as far as we know it’s totally legal to record streams from analog or Internet radios. Nobody has ever been tried in court for this matter. However you may need to check in certain parts of the world with more restrictive laws.
Will I get banned from Spotify for ripping streamed music?
It is impossible for sites and applications like Spotify to know that you are doing this, however ripping music does go against Spotify's terms of service. If you were to publicly announce that you were doing it in some way then they would have every right to ban you. But apart from this they could never know.
Can i pass the ripped songs on to my friends?
Formally speaking — no, it’s not legal. However, it’s up to you to decide what you want to do with your music…
If I’m ripping music from Spotify do I risk getting banned from using their service?
Absolutely not. There is no way for them to tell if anyone’s ripping their music stream. Well, unless you decide to tell them that by yourself.