Justice Dept. reviewing agreements with music licensing groups

Justice Dept. reviewing agreements with music licensing groups
© Greg Nash

The Department of Justice (DOJ) on Wednesday opened an antitrust investigation into consent decrees given to two major music licensing groups.

The investigation into the American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music, Inc. (BMI) will determine whether the consent decrees should be maintained in their current form, modified or terminated.

ASCAP and BMI, the two largest performing rights organizations in the U.S., are required under consent decrees to issue licenses covering all works in their repertory upon request from music users.

ADVERTISEMENT

If a license price is not agreed on, the decrees provide for a “rate court” proceeding in front of a district judge.

“The ASCAP and BMI decrees have been in existence in some form for over seventy-five years and have effectively regulated how musicians are compensated for the public performance of their musical creations,” Makan Delrahim, Assistant Attorney General for the Antitrust Division, said in a statement.

“There have been many changes in the music industry during this time, and the needs of music creators and music users have continued to evolve. It is important for the Division to reassess periodically whether these decrees continue to serve the American consumer and whether they should be changed to achieve greater efficiency and enhance competition in light of innovations in the industry.” 

This investigation comes one year after President TrumpDonald John TrumpGOP divided over impeachment trial strategy Official testifies that Bolton had 'one-on-one meeting' with Trump over Ukraine aid Louisiana governor wins re-election MORE signed into law the Music Modernization Act, which reforms the way royalties are collected and the way artists and labels are compensated in the digital age.

The BMI responded to the investigation Wednesday, saying it welcomes the chance to modernize licensing.

“The DOJ’s long-anticipated review of the BMI and ASCAP consent decrees and call for public comment represent an opportunity to do what BMI has been advocating for years – modernize music licensing," the group said in a statement.

"BMI and ASCAP have already issued an open letter in which we share a proposed solution for the industry that will benefit music creators and licensees alike. We look forward to working with the DOJ, licensees and our other music partners to help ensure a smooth process that safeguards a vibrant future for music.”

Elizabeth Matthews, the CEO of ASCAP, similarly praised the investigation.

"Thanks to the DOJ’s review, we now have the unique opportunity to reimagine the music marketplace in today’s digital age," Matthews said in a statement. "A more flexible framework with less government regulation will allow us to compete in a free market, which we believe is the best way for our music creators to be rewarded for the value of their music."