Not the Agency You’re Looking For: The Copyright Office’s Misguided Antitrust AdventureJuly 25, 2016
The increasing frequency with which the Copyright Office has inserted itself into policy debates raises questions about the scope of its expertise and authority. An illustrative example of how the Office’s opinions can cause problems occurred earlier this year. During the Department of Justice’s Antitrust Division inquiry into how performance rights organizations (PROs) ASCAP and BMI license songs with multiple authors where not every author is a member of the PRO (i.e., where either PRO represents only a ‘fraction’ of the ownership stake in the song), a member of Congress sought out the opinion of the Copyright Office, and the Office responded. Although it’s unremarkable for an agency to offer its opinion in response to a lawmaker request, it is remarkable for that agency to reach into unfamiliar areas of law, ignore basic public policy concerns in that area of law, and offer its own unqualified judgment on matters properly within the jurisdiction of another agency.
As we’ve written about before, the PROs present a conundrum for antitrust enforcers; the existence of large, one-stop-shop entities makes licensing music more efficient, but also creates opportunities for illegal cartel-like behavior. The solution that has successfully worked for 75 years has been to allow them to operate under antitrust consent decrees, sets of conditions negotiated with the Department of Justice that preserve the marketplace benefits of the PROs while limiting the PROs ability to engage in abuse. So while the PROs are in the business of licensing music copyrights, the bottom line issue for the Department of Justice when examining the PROs is always antitrust, competition, and the public interest. This is as it should be, and exactly why it’s so concerning to see the Copyright Office weigh in on this issue without acknowledging any of those concerns.
The collateral effect of the Copyright Office’s careless sortie into antitrust policy manifested itself last week when five members of the House Judiciary Committee wrote to Attorney General Loretta Lynch, prompted by reports that that Department of Justice intends to reject the adoption of ‘fractional licensing’ practices, the position favored by the PROs and the music publishing industry, demanding to know why the Department was not setting aside its own judgment on an antitrust matter in favor of the Copyright Office’s. This is a striking position to take given that the Copyright Office does not have authority over any antitrust matters, let alone the PRO consent decrees, and is not even the authoritative source on copyright law within the administration.
The Copyright Office is not an antitrust agency, and it shows in its analysis. The Office’s letter is notable both for what it focuses on and what it ignores. While the letter offers a passing analysis of how copyright law handles joint authorship, a subject nominally within its expertise, much of the text is spent expressing the Office’s opinions on other matters: common industry practices, how the PROs operate, and the scope and interpretation of the antitrust consent decrees governing the PROs. What these subjects all have in common is that the Antitrust Division, in the course of both its longtime oversight of the PROs and its current inquiry–an inquiry which has involved two rounds of public comments by stakeholders and numerous stakeholder meetings–is better positioned to review them and reach appropriate policy conclusions. That the Office’s letter never even addresses the question of whether fractional licensing would have anticompetitive effects on the licensing marketplace, a fundamental aspect of any antitrust analysis of the PROs, underscores why its opinion should not be given any weight.
It’s worth noting that even when the Copyright Office does weigh in on matters of purely copyright law, it is not “[t]he government’s copyright expert,” as the letter to Attorney General Lynch calls it. In fact, there are at least two agencies authorized by statute to either assist or advise Federal departments and agencies on copyright policy: the Copyright Office (“shall…[p]rovide information and assistance to Federal departments and agencies and the Judiciary on national and international issues relating to copyright,”) and the United States Patent and Trademark Office (“shall advise Federal departments and agencies on matters of intellectual property policy in the United States.”) Given the overlapping authorization on copyright policy, it’s difficult to consider one agency the designated expert on the issue.
Another example that highlights the limits of the Copyright Office’s authority is its role in the triennial Section 1201 anticircumvention exemption proceedings. There, Congress instructed the Copyright Office to recommend the approval or denial of exemption requests to the Librarian of Congress, but only after consulting yet another agency, the National Telecommunications and Information Administration. The Copyright Office’s handling of the rulemaking has consistently been criticized, reversed by Congress, and has recently become the subject of a constitutional challenge.
There are many lessons to be learned from this episode, but one in particular stands out: Although the Copyright Office expresses its opinion on many policy matters, it’s only one opinion. And when that opinion strays as far afield of the Office’s authority and expertise as the letter on PRO licensing does, it should be ignored.
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