Public Knowledge Responds to Reports on Department of Justice’s ASCAP/BMI Consent Decree DecisionJuly 1, 2016
Reports now indicate that the Department of Justice has ended its lengthy process to amend the consent decrees governing music publishing in the United States by declining to make adjustments. If true, this would prevent music publishers from withdrawing digital public performance rights from the blanket licenses offered by the two largest performance rights organizations in the United States, ASCAP and BMI. Due to the threat to competition posed by such large concentrations in licensing authority, ASCAP and BMI operate under antitrust consent decrees that govern their licensing practices.
Reports also indicate that after considering the industry practice of ‘fractional licensing’, the DOJ determined that giving the practice force of law through the consent decree would exacerbate concerns about competition and undermine the benefits of the organizations. Public Knowledge remains committed to a music licensing marketplace that benefits both consumers and musicians, and strong antitrust protections play a key role in achieving that purpose.
The following can be attributed to Raza Panjwani, Policy Council at Public Knowledge:
“Any discussion about competition and the music industry must begin with the fact that in recent years antitrust enforcers allowed concentration and consolidation to become the norms, including the recent acquisitions by Universal Music Publishing and Sony/ATV of BMG Publishing and EMI Publishing, respectively. As a result, a handful of companies serve as gatekeepers, with the power to supplant consumer choice. In such a situation, antitrust law has the power to ensure a diverse array of innovative digital platforms can develop and compete to deliver music to listeners.
“Therefore it’s refreshing to see that, based on reports, it appears that the Department of Justice is once again demonstrating that robust enforcement of antitrust law in the United States can play an integral role in preventing anticompetitive behavior, whether that’s the development of cable monopolies, price fixing in the ebook market, or collusion in an increasingly concentrated music publishing market. In each case, the ultimate winner is the public.
“Performance rights organizations (PROs) like ASCAP and BMI serve an important role in the music licensing marketplace, reducing transaction costs and creating an efficient licensing mechanism that benefits both songwriters and license seekers. But licensing efficiency is not reason enough to dismiss antitrust concerns — ASCAP and BMI were put under consent decrees precisely because they engaged in anticompetitive activities, and by their nature, would continue to pose a threat to competition today without regulation and oversight. Thanks to the consent decrees, the marketplace enjoys the benefits of the PROs, while mitigating their potential harms.
“It appears that the Department has agreed with our view that antitrust protections should not be removed at a time when the music publishing industry is more concentrated than ever. The state of the marketplace, and recent bad behavior by the publishers have made it clear granting the music publishers the changes they requested would serve as a green light for additional abuse.
“Consumers and songwriters benefit from a marketplace that welcomes new entrants and platforms. Songwriters benefit from a diversity of outlets to play their songs, and consumers come out ahead when they have more choices among platforms to find and enjoy music. Consumers should be picking the winners in the marketplace, not a handful of companies with the ability to exercise hold out power.”