DOJ Reviewing ASCAP, BMI Consent Decrees

Justice antitrust chief Makan Delrahim signaled this week that his division was taking a fresh look, and with a fairly critical eye, at the consent decrees under which performance royalty organizations
(PROs) collect their fees.

Makan Delrahim

According to MultiChannel News, that came in an appearance this week at Vanderbilt Law School,where he signaled some of the 1,300 consent decrees on the books had clearly outlived their usefulness, particularly those outliving the industries they were meant to circumscribe, including piano rolls and buggy whips.

Delrahim pointed particularly to the ASCAP and BMI music licensing consent decrees that also date from most of a century ago, and have also been the subject of recent litigation, which Delrahim also cited as good background on the issue.

"The way music is licensed has been governed by these consent decrees since 1941,” he said. “So, 77 years of a consent decree, rates being set by a judge in rate court as opposed to free-market competition [which he favors], and we are taking a look at that."

He referenced the recent Pandora v. ASCAP decision and recommended it to anyone interested in music or antitrust law.

He said that music has innovated from bandstands to streaming, while the licensing and ownership of music is still governed by those 77-year-old consent decrees.

He said it was incumbent upon the government to dig down. "As public agencies we need to take a look and see if those consent decrees are still relevant in the marketplace," he said, clearly signaling they are up for debate. "If they have solved the competitive problem, they could become anti-competitive tools over time; if they were not necessarily the best ideas at the time, it doesn't make a whole lot of sense for them to stay."