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Today, the Department of Justice concluded its review of the antitrust consent decrees governing ASCAP and BMI, the two largest music performance rights organizations (PROs) in the United States. After two years of extensive public comment and analysis, the Department has determined it would be inappropriate to amend the consent decrees in ways that would enable music publishers to take greater advantage of their market dominance in negotiating licenses. Additionally, it has clarified licensing practices that came to light during its review. Public Knowledge has advocated for the Department to adopt these positions throughout the review and welcomes the decision.
The following can be attributed to Raza Panjwani, Policy Council at Public Knowledge:
“The Department of Justice has reached an outcome that appropriately takes into account the public interest and the pro-competitive role played by ASCAP and BMI in the music licensing marketplace. We’re heartened by the Department’s decision to leave the protections of the consent decrees in place, ensuring that the PROs will continue to offset the harms posed to the licensing marketplace by industry consolidation, rather than amplify them.
“Allowing the large publishers to engage in strategic ‘partial withdrawals’ would have had a negative impact, given that similar maneuvers have been used by publishers in the past as cover for collusive behavior and striking deals that have harmed songwriters. We note that we’re joined by the songwriter community in supporting the Department on this aspect of their determination.
“The clarification that the consent decrees require the PROs to only offer “100%” or “full-work” licenses -- licenses that permit paying users ranging from restaurants to radio stations, and from bars to yoga studios, to play any song in the PRO’s catalog without further investigation or negotiation of rights -- is logical and similarly pro-competitive. In reaching its determination on this point, the Department was correct to disregard a flawed Copyright Office letter on the issue that failed to account for any competition considerations, part of an obvious pattern of overreach for the Office.
“Simply put, PRO licenses are valuable because they offer licensees a simple, clear, and efficient method of clearing rights. The ‘fractional licensing’ approach advanced by the industry is not only unsupported by a plain reading of the consent decrees, but would also undermine the very benefits of the PRO licenses themselves.
“Major music publishers invited the Department of Justice to scrutinize the licensing practices of the PROs, expecting to win permission to leverage their catalogs in troubling ways. Instead, the Department carried out its mandate in evaluating the the marketplace, the public interest, and potential threats to both. The result is that in addition to clarifying the issue of full-work licensing, the Department also identified a conflict of interest in how ASCAP’s publisher members partook in licensing negotiations, and other violations of the consent decree that resulted in a $1.75 million fine.
“We applaud the Department for its diligent and thorough review of the PRO consent decrees, and for reaching conclusions that will preserve the existing efficient marketplace.”