DOJ to Review Music-Fee System

WSJ is reporting the U.S. Department of Justice is reviewing the decades-old legal system that governs what songwriters and publishers charge broadcasters, digital-music services and other licensees to play their compositions.

The rare review, announced this week by the Justice Department's Antitrust Division, comes as technology shakes up the music industry, depressing record sales and leaving songwriters increasingly dependent on the performance royalties they receive from radio and digital-streaming services such as Pandora Media Inc.  and Apple Inc.'s newest acquisition, Beats Music.

Since a pair of antitrust settlements dating back to 1941, the federal government has mandated that the country's two biggest performing-rights organizations—American Society of Composers, Authors and Publishers and Broadcast Music Inc.—license their members' work to anyone willing to pay the rates set by federal judges in "rate court," run through the U.S. District Court for the Southern District of New York. Some companies such as Apple have opted to make direct deals with rights holders instead.

ASCAP and BMI would prefer that the Justice Department eradicate the consent decrees altogether, according to people familiar with the matter, but their proposals in the review process will be less ambitious.

The review comes as Washington lawmakers consider a broader overhaul of copyright law, including the separate rules that determine what digital-music services pay record companies and performers to transmit their recordings.

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