August 14, 2019
ASCAP and BMI, the two largest U.S. performing rights organizations, have operated under separate 1941 consent decrees. The decrees, designed to protect competition, dictate how ASCAP and BMI (but not rivals SESAC and Global Music Rights) license music. In February, ASCAP and BMI, who are fierce competitors, urged the consent decrees to be updated or ended, and, last year, Justice Department assistant attorney general for the antitrust division Makan Delrahim vowed to examine the decrees to “determine their validity.”
Variety reports that “earlier this week, 12 free market organizations asked the DOJ to strengthen the consent decrees, arguing that the ‘inherently anti-competitive’ music industry needs those regulations.” The DOJ solicited public comments to answer questions such as whether “the Consent Decrees continue to serve important competitive purposes today,” and what provisions if any “are no longer necessary to protect competition” or are “ineffective in protecting competition.”
The DOJ also asked what modifications “would enhance competition and efficiency” and whether “termination of the Consent Decrees [would] serve the public interest.” If so, it asked if termination should be immediate or gradual, and what modifications might make “an efficient transitionary period.”
Other questions included are if “differences between the two Consent Decrees adversely affect competition,” and if there “are existing antitrust statutes and applicable case law sufficient to protect competition in the absence of the Consent Decrees.” ASCAP and BMI’s responses, says Variety, “are expansive, complex and exceed 30 and 40 pages respectively.”
Though they differ on points, both ASCAP and BMI agree that consent decrees are obsolete; they also advocate a transition period with four provisions: allow music users to “continue to have automatic access to the ASCAP and BMI repertoires with the immediate right of public performance … contingent upon licensees providing ASCAP and BMI with necessary business information.” They suggest retaining the “rate court process for resolution of rate disputes, as recently reformed by the Orrin G. Hatch-Bob Goodlatte Music Modernization Act (MMA).”
Further they say both organizations “will continue to receive non-exclusive U.S. rights from our writers and publishers, which allows licensees, songwriters, composers and publishers to continue to negotiate direct deals if they so choose,” and, last, that the current forms of licenses — “beyond the blanket license” — be preserved.
Radio Ink reports that NAB filed comments stating that the DOJ “should neither terminate nor modify the ASCAP and BMI consent decrees” but rather “should defer to Congress’s expertise in this area.” The 12-page NAB letter can be read here.