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US broadcasters hit back at government intervention in Global Music Rights case

By | Published on Thursday 16 January 2020

Global Music Rights

America’s National Association Of Broadcasters has hit out at the US Department Of Justice’s recent intervention in the ongoing dispute between boutique collecting society Global Music Rights and the Radio Music License Committee.

GMR is the newish performing rights organisation founded by veteran artist manager Irving Azoff which represents a small group of accomplished songwriters in the collective licensing domain. It competes with the bigger American collecting societies BMI and ASCAP as well as SESAC, all of which represent the performing rights in their members’ songs.

Because BMI and ASCAP both represent such large catalogues of music, they are regulated by the DoJ through the so called consent decrees, which are meant to overcome the competition law concerns that are often raised about collective licensing. SESAC, although not governed by a consent decree, agreed to third party mediation on royalty disputes during a past legal battle with the RMLC.

Since Azoff set up GMR, the radio licensing committee has been busy trying to force it to also accept third party mediation. That has resulted in a regular back and forth of statements and legal claims from both sides, with lawsuits being filed back in 2016.

RMLC basically argues that, because GMR is a collecting society, and collecting societies always raise competition law concerns, it should be subject to some form of regulation and/or mediation just like BMI, ASCAP and SESAC. But GMR counters that, because it represents a small group of songwriters, while RMLC speaks for a large portion of the US radio sector, it’s the committee rather than the society that behaves in an anti-competitive way.

This poses the interesting question as to whether ‘buyers’ collaborating on deal negotiations raises the same competition law concerns as when ‘sellers’ collaborate on deals.

Last month the DoJ submitted an amicus brief to the court hearing the RMLC v GMR case sharing its opinions on that very point. The government department said that it disagreed with the RMLC’s arguments in this domain, and that a buyer’s cartel can be “equally destructive of competition as a seller’s cartel”, even though these cases come up less frequently.

An intervention from the government department that directly regulates GMR’s bigger rivals countering the arguments of the RMLC seemed like a considerable boost for the mini society’s legal case. Which, needless to say, hasn’t gone down well with the radio stations.

Hence the new intervention by the National Association Of Broadcasters, which has many members in common with the RMLC but also speaks for other radio companies not actively part of this particular legal battle.

In a submission to the court this week, the NAB says it “has a strong interest in the litigation between the RMLC and GMR, as it … involves the relationship between licensees and a [collecting society] and threatens to harm NAB members that are not involved directly in the litigation”.

The NAB then says that the DoJ’s intervention in this case was “unorthodox”, while reminding the court that it “owes no deference to the views” of a US government department.

On the specific opinions expressed by the DoJ last month, the NAB argues that these are “substantial deviations from historical department policy” and that the government department “offers no explanation for the striking shift from protecting our nation’s citizens against the illegal activities of [collecting societies] to suggesting … that a [society] is a victim of per se illegal conduct in an industry that has been under active department supervision for decades”.

“As part of that decades-long mission”, it goes on, “the department repeatedly acknowledged the role of entities like RMLC, organised for the purpose of collectively negotiating reasonable rates with [collecting societies], and never once to NAB’s knowledge suggested to a court that they were illegal let alone per se illegal”.

“Illegal per se” refers to activities considered under US law to be inherently illegal, reducing the obligations on the other side to prove bad conduct.

Moreover, the NAB adds, “under the department’s own long-standing enforcement standards, it is clear that buying collaborations are not per se illegal so long as they are reasonably related to an efficiency”. And, it then argues, GMR’s own lawsuit against RMLC demonstrates the complexity of music licensing, and why entities like RMLC are needed to bring some efficiencies to the proceedings.

It remains to be seen how the court responds to the respective arguments of GMR, RMLC, DoJ and now NAB. Though with the DoJ also currently reviewing the aforementioned BMI/ASCAP consent decrees, we could yet see some shifts in the US as to how the collective licensing process is regulated.

Given that songwriters and music publishers have long argued that over-regulation in the US results in song rights being routinely under-valued, that’s something that would be widely welcomed by the music community.