The Justice Department is weighing in on another entertainment industry battle that touches on antitrust concerns.
The DOJ filed a brief on Thursday in ongoing litigation between Irving Azoff’s Global Music Rights, a performing rights organization to represent artists and songwriters, and the Radio Music License Committee, which represents most of the country’s radio stations, over claims of price fixing.
Global Music Rights and the Radio Music Licensing Committee have each sued each other by claiming their negotiating adversaries are operating illegal cartels.
In their brief, the Justice Department urges the judge in the case to reject some of Radio Music Licensing’s arguments.
“When competitors agree to a restraint that is per se illegal, it does not matter whether they are buyers or sellers of good and services,” the DOJ stated in its filing. “Per se rules apply to agreements among competing buyers in the same way that they apply to competing sellers because the Sherman Act protects competition not only in output market where sellers compete to sell goods or services, but also in input markets where businesses compete to purchase various inputs.”
The DOJ argues that Radio Music License Committee wrongly makes the point that Global Music Rights is claiming not that they are price fixing, but “at most, a group boycott claim.”
“The two categories of restraints—price fixing and group boycott— are not, however, mutually exclusive. Parties can reach an agreement that ‘involves not only a boycott but also a horizontal price-fixing arrangement’,” the DOJ stated.
The DOJ also contends that Radio Music License Committee “peddles a similarly simplistic argument” by wrongly claiming that Global Music Rights failed to “state a price-fixing claim because it alleges merely an agreement among buyers to insist that the sales price be determined by a third party (here, an arbitrator), not an agreement on price itself.”
“The mere fact, however, that a third party decides the price on which competitors will agree does not, standing on its own, remove the restraint from the price-fixing category. That restraint is still an agreement to charge the same prices and thus still eliminates competition on price.”
U.S. District Judge Terry Hatter is weighing the radio stations’ motion for judgment and Global Music Rights’ motion to dismiss.
The Justice Department is currently reviewing ASCAP and BMI consent decrees that have governed much of the music licensing business for more than 75 years.
Radio Music License Committee did not immediately respond to a request for comment.