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US Department Of Justice confirms another consent decree review

By | Published on Thursday 6 June 2019

US Department Of Justice

The US Department Of Justice has confirmed it is instigating a review of the so called consent decrees that regulate American song right collecting societies BMI and ASCAP. Yeah, another one.

The big question the US government seeks to answer is: should the documents that regulate the collective licensing of songs Stateside be maintained, modified or terminated? Or just converted into comic sans so that no one takes them seriously anymore.

Collective licensing – where large groups of music rights owners (quite often all of them) decide to license as one through a collective management organisation – always throws up competition law concerns. How this is dealt with – by either competition or copyright law, or both – varies greatly from country to country.

US societies BMI and ASCAP are arguably the most tightly regulated, somewhat ironically given that, unlike many of their counterparts elsewhere in the world, the American rights organisations don’t actually have a monopoly over their members’ rights. And, of course, there are two of them. And two more, with smaller societies SESAC and GMR also representing the performing rights of songwriters in the US market.

Most in the music community have long argued that the consent decrees, originally drafted in 1941, are no longer fit for purpose in this new-fangled digital age.

However, when the DoJ last reviewed them three years ago, it decided not to change anything. Instead it caused a ruckus by expressing a controversial opinion on whether or not BMI and ASCAP should licence 100% of any one song even when their members only control a portion of the work. The DoJ said that they should. The music industry disagreed. And ultimately the courts sided with the songwriters.

So that was a happy outcome. Except that the fucking consent decrees were still sitting there gathering dust, happily regulating the music rights industry like it was 1994. This is why the music community was pleased to hear, earlier this year, that another DoJ consent decree review was now in the works. And the government agency confirmed that that review was now going ahead yesterday.

“The ASCAP and BMI decrees have been in existence in some form for over 75 years and have effectively regulated how musicians are compensated for the public performance of their musical creations”, pronounced Makan Delrahim, Assistant Attorney General for the DoJ’s Antitrust Division, somewhat optimistically.

However, he then conceded, “there have been many changes in the music industry during this time, and the needs of music creators and music users have continued to evolve. It is important for the division to reassess periodically whether these decrees continue to serve the American consumer and whether they should be changed to achieve greater efficiency and enhance competition in light of innovations in the industry”.

Needless to say, both BMI and ASCAP welcomed the news, while also pointing out that they’d already shared their opinions on what should happen to the regulatory documents back in February when word of an impending review began to circulate.

The former stated yesterday: “The DoJ’s long-anticipated review of the BMI and ASCAP consent decrees and call for public comment represent an opportunity to do what BMI has been advocating for years – modernise music licensing. We look forward to working with the DoJ, licensees and our other music partners to help ensure a smooth process that safeguards a vibrant future for music”.

ASCAP boss Elizabeth Matthews added: “Thanks to the DoJ’s review, we now have the unique opportunity to reimagine the music marketplace in today’s digital age. A more flexible framework with less government regulation will allow us to compete in a free market, which we believe is the best way for our music creators to be rewarded for the value of their music. A free market would level the playing field, encourage competition and allow us to innovate on behalf of music creators and licensees alike, while ensuring fair compensation for songwriters”.

Not everyone will be supporting a radical revamp of how BMI and ASCAP are regulated though. The MIC Coalition – which brings together trade bodies representing users of music – will fight to keep the consent decrees in place pretty much as they are. Songwriters and music publishers would counter that that’s because excessive regulation of collective licensing in the US has kept the rates corporate music users pay artificially low for years.

Posting on Twitter, the Coalition said yesterday: “Throughout their successful history, the decrees have helped mitigate anti-competitive behaviour, while also ensuring songwriters and creators get paid when their music is played in millions of American venues. The modification, elimination or even the possible sunset of the decrees at the present time would lead to chaos for the entire marketplace”.

So expect plenty of lively debate ahead. Whether the music industry will get the reforms it wants this time round remains to be seen.