Entertainment

Justice Dept. leaves decades-old music industry decrees unchanged


The Justice Department has decided against rolling back legislation that governs music licensing, averting a raft of possibly chaotic changes.

After a two-year investigation, there will be no changes to the 80-year-old consent decrees that govern two groups that issue licenses to perform music publicly, Makan Delrahim, the Justice Department’s top antitrust official, said in a statement.

The review included more than 800 public submissions as well as a workshop that featured LeAnn Rimes. While the two performing rights organizations, the American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music Inc. (BMI), had welcomed potential reform to reflect changes in the music industry, other groups said it could have caused chaos.

ASCAP and BMI were created to help songwriters, and the music publishers that represent them, to negotiate licensing deals with the plethora of bars, restaurants, radio stations and other outlets that play music for the public.

The decision comes three months after the Trump administration passed the Music Modernization Act in a bid to improve compensation to musicians and songwriters in the digital era.

It also marks one of the last actions the Iranian-American lawyer will take as assistant attorney general for the antitrust division — a role that concludes this month. The UCLA graduate has had a particular focus on removing old consent decrees that in some cases have sat on the books for over a century.

“Throughout the Division’s investigation, many licensees expressed the view that the decrees are largely working,” Delrahim said. “For many composers, songwriters, and publishers, ASCAP and BMI licenses provide the most meaningful way to be compensated for the public performance of their works with respect to many categories of music users.”

Delrahim said the ASCAP and BMI consent decrees should still be reviewed every five years. Increased competition in licensing, including more direct licensing, could trigger a need to modify the laws.

“Competition must be the watchword,” he said.

ASCAP and BMI represent about 90% of the public performance licensing market. They pool the copyrights held by their composers, songwriters and publishers and collectively license those rights to music users, from bars that play music to digital music streaming services.

Concerns about price fixing by songwriters led to a Justice Department antitrust lawsuit against the two organizations, bringing them under federal court supervision in 1941.

The consent decrees signed that year require ASCAP and BMI to offer licenses to their entire catalog to anyone who wants one, at a fee that’s either negotiated or set by a federal judge in a “rate court.”

Critics of the decrees argued they prevent the performing rights organizations from coming up with new licensing terms that could make the market more competitive.

Delrahim noted that the recent Music Modernization Act has already addressed licensing problems that were leaving many songwriters unpaid. Moreover, he welcomed the two performing rights groups’ launch in December of a free licensing database called Songview, aimed at making it easier to determine which licenses users need.

In 2016, the DOJ concluded a similar review.

During Delrahim’s time, the department has removed some 800 of these decrees. One of the most high-profile cases was his decision to terminate the Paramount decrees.

In 2019, the U.S. Justice Department put an end to these long-standing consent decrees that governed the distribution and exhibition of motion pictures.

The decrees, a series of settlements entered between 1948 and 1952, broke up Hollywood’s hold on production, distribution and exhibition following a landmark Supreme Court case in which the justices found studios had illegally conspired to fix prices. The most famous result of the Paramount decrees was that studios that owned cinemas were forced to divest their theaters .

Delrahim joined the Justice Department in 2017 after a stint in the White House counsel’s office, helping shepherd Supreme Court Justice Neil Gorsuch’s confirmation.




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