DOJ Won’t Seek To Terminate Or Modify Consent Decrees Governing Music Licensing

Makan Delrahim (AP Photo/Cliff Owen)

The Justice Department will not move to terminate or modify the 80-year consent decrees that govern how most music is licensed after a review.

Makan Delrahim, the chief of of the Antitrust Division, cited the lack of consensus among stakeholders in the industry as a reason for not moving to terminate the decrees, which govern ASCAP and BMI. The DOJ’s review included a public workshop last summer, which featured input from a number of musical artists, along with songwriters and publishers.

“We found that there was a lot of efficiencies that the blanket licenses, the collective rights organizations provide,” Delrahim said during a webinar on Friday for Vanderbilt University. “There was a lot of benefits to artists. In fact, the artists community at a workshop was split. Mr. Jon Bon Jovi, for example, did not think there should be changes because many artists relied on these types of licensing rights and the consent decree to make their living. LeAnn Rhimes gave a very impassioned and cogent argument for why they should be terminated. So you have artists and you have the licensee community also were all split.”

He also said that they may have been able to move to pursue modification of the decrees, but the Covid-19 crisis prevented them from having the type of “personal attention and the ability to get people in the room and to try to really address the inefficiencies.”

In 2019, the DOJ opened a review of the decrees, put in place in 1941 to govern the business practices of ASCAP and BMI.

ASCAP favored a transition period to “enable an orderly transition to a free market.” The National Music Publishers Association, meanwhile, wanted the decrees to be modified to allow copyright owners to selectively withdraw digital rights from ASCAP and BMI. But groups like the Motion Picture Association and the National Association of Broadcasters wanted the decrees kept in place, arguing that to terminate them would jeopardize competition as they obtain rights clearances for music in movies and TV shows.

The DOJ also reviewed the consent decrees during the Obama administration, but concluded that “the current system has well served music creators and music users for decades and should remain intact.”

One of Delrahim’s initiatives has been reviewing consent decrees across all industries to gauge their continued effectiveness and relevance. A federal court gave the greenlight last year to terminate the Paramount consent decrees, which had dictated the conduct of studio distributors and theatrical exhibitors.

Delrahim will step down from the Antitrust Division on Jan. 19.

David Israelite, president and CEO of the National Music Publishers Association, said in a statement, “We appreciate the Antitrust Division has spent a great deal of time and effort reviewing the ASCAP and BMI consent decrees, however we are disappointed that DOJ chose not to update the regulations to allow for freedoms that would have greatly helped songwriters and music publishers realize the true value of their work. We understand that the [performing rights organizations] and the Department could not come to an agreement on broad changes and therefore allowing selective withdrawal of digital rights could not be fully considered, however we see this as a massive missed opportunity for music creators.”

He added, “We agree as Assistant Attorney General Delrahim stated, that ‘the ultimate goal should be a market-based solution that ensures songwriters, publishers, and other artists are compensated fully for their creative efforts at market rates,’ and we are relieved to hear his denunciation of compulsory licensing.” He said that he hoped that the Biden administration would take up the issue.

The National Association of Broadcasters was pleased with the decision.

NAB President and CEO Gordon Smith said in a statement, “DOJ’s decision not to take action will ensure that ASCAP and BMI continue to fairly and efficiently license musical works in a manner that is pro-competitive. Broadcasters look forward to continuing to work with the performance rights organizations for the mutual benefit of songwriters, music licensees and listeners.”


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