DOJ To Review Music Licensing Decrees

The Justice Department said Wednesday it would review two consent decrees reached with music licensing groups ASCAP and BMI in 1941, a decision that could upend the business of licensing music to online companies, movie companies, commercials, bars and restaurants.

Reuters reports the department said it planned to review settlements reached with the American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music, Inc (BMI) to set how the organizations, which license most music in the United States, must operate.

Companies that license music have worried about a sharp increase in costs if the system is changed because ASCAP and BMI license about 90 percent of music.

In the complicated world of music royalties, songwriters and publishers hire the two organizations to license their songs to digital streaming services such as Pandora and Spotify Technology SA, radio and television stations and other music users.

Under the consent decrees, the two organizations are required to license to anyone upon request, with pricing disputes settled by a judge.

The consent decrees may remain as they are, or be changed or scrapped altogether, the department said.

“There have been many changes in the music industry, ... and the needs of music creators and music users have continued to evolve,” said Makan Delrahim, head of the Justice Department’s Antitrust Division, in a statement Wednesday.

Under Delrahim, the department is reviewing old consent decrees, many of which do not have an expiration date, with an eye toward dropping those which are out of date.

The MIC Coalition, which represents groups whose members include streaming companies like Spotify and Pandora, argued that the consent decrees were needed, despite their age, because BMI and ASCAP control so much music.

The Justice Department will accept comments on the matter through July 10.

In response to the review of the consent decrees, NAB President and CEO Gordon Smith issued a statement:

“Broadcasters welcome the opportunity to participate in the Justice Department’s review of the music antitrust consent decrees, and appreciate that the tone of DOJ’s inquiry recognizes the ongoing importance of this antitrust framework.

"For decades, these BMI and ASCAP antitrust consent decrees have ensured a fair and efficient licensing of musical works to local radio and TV stations. The decrees benefit songwriters, broadcasters, music licensees, and music listeners. Absent broader legislative reforms, their preservation is essential to a fully functional music marketplace.”