The Department of Justice (DOJ) is reviewing the critically important antitrust consent decrees that underpin much of the music licensing marketplace. At the same time, Congress is close to enacting extensive updates to music licensing laws through the Music Modernization Act (MMA), which reflects a historic consensus between music stakeholders. The legislation will help strengthen and formalize meaningful congressional oversight of DOJ's consent decree review preserving the delicate legislative balance and preventing chaos in music licensing. Television and radio broadcasters strongly support the MMA and its swift passage without major changes.
The two largest performing rights organizations (PROs) - ASCAP and BMI - license public performances of songs to virtually every venue and music platform in the United States. The music you hear on your favorite television show, during the broadcast of live events, on your favorite radio station, over the sound system as you are shopping or dining out or through your favorite customized stream are all licensed through these PROs.
To comply with copyright laws, broadcasters and others obtain licenses from PROs to use the songs they control. These licenses can cover all the works in each organization's repertoire, and generally offer both copyright owners and licensees a more efficient way to license public performance rights than individual negotiations between every songwriter and every licensee. Despite that efficiency, however, collective licensing practices raise significant antitrust concerns that have long been recognized by the Supreme Court.
ASCAP and BMI are the two largest PROs and their catalogs cover more than 90 percent of the market for musical works performances. To ensure they operate consistent with antitrust laws, DOJ entered into consent decrees that provide these organizations the ability to conduct business in a fair, efficient and equitable manner to benefit both songwriters and licensees. As a backstop, there are federal courts to oversee the PROs' behavior and decide rate disputes between ASCAP and BMI and any entity wishing to license their songs. The decrees have paved the way for efficient and stable song licensing, benefiting consumers, licensees and songwriters for decades. Given the rapid changes in the music licensing marketplace, they are more important today than ever.
In 2016, after a thorough, multi-year review based on an extensive public record, DOJ rejected proposed modifications from ASCAP and BMI that would weaken the consent decrees and reaffirmed their fundamental protections. Despite no discernable changes in the marketplace justifying a different outcome, DOJ is once again reviewing these decrees and has recently signaled it will unilaterally move to terminate the decrees with very little public input.
Terminating the consent decrees without first establishing a sufficient alternative framework would bring chaos to the music licensing marketplace, threatening the availability of music to consumers on every platform and in every venue across the country. Taking such action, at a time when Congress is in the advanced stages of the most extensive rewrite of music licensing laws in decades, would undermine the very certainty and efficiency that the MMA promises.
The bottom line:
Fortunately, the Senate Judiciary Committee has included language in its version of the MMA that would formalize congressional oversight of DOJ's review of these consent decrees, ensuring Congress has a robust role in helping prevent the marketplace chaos that would result from terminating the decrees without a sufficient alternative framework in place.