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US government sides with Global Music Rights in radio dispute

By | Published on Friday 6 December 2019

Global Music Rights

The US Department Of Justice has intervened in the ongoing legal dispute between the country’s Radio Music License Committee and boutique song rights collecting society Global Music Rights. The government agency has urged the judge hearing the case to reject some of the RMLC’s arguments, a move that GMR has dubbed as a “victory for songwriters”.

GMR, of course, is the boutique performing rights organisation that was set up by artist manager Irving Azoff. It represents the performing rights of a small but very well-formed gang of acclaimed songwriters. In doing so, it competes for members with the three other PROs that operate in the US, them being BMI, ASCAP and SESAC. Though broadcasters wanting to play music written by any songwriter need a licence from all four.

Because BMI and ASCAP both represent such large catalogues of songs, they are regulated by the Department Of Justice through the so called consent decrees, which are meant to overcome 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 RMLC 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. RMLC argues that GMR, as a collecting society, raises competition law concerns. GMR counters that it is a boutique agency representing a small community of songwriters, whereas RMLC negotiates for a significant portion of American radio stations. Therefore, it argues, it’s the radio licensing agency, and not the collecting society, that poses competition law issues.

This all went legal in 2016. There was initially a dispute over whether the legal battle should happen in Pennsylvania or California. Ultimately it’s ended up in the latter, GMR’s preferred location for the litigation. The DoJ’s intervention is on one specific element of the case. It disputes an argument that the RMLC has presented in a bid to have GMR’s claim against it dismissed.

According to the LA Times, the DoJ said it “found fault in arguments from the Radio Music License Committee, arguing that a buyer’s cartel can be ‘equally destructive of competition as a seller’s cartel’, even though these cases come up less frequently”. Therefore, the DOJ said “RMLC was wrong to argue that the songwriters’ group would have to prove its intent to cause harm by price fixing”.

GMR’s lead counsel in the dispute, Daniel Petrocelli, said yesterday that “the court filing by the Department Of Justice reaffirms the legal position of GMR and vindicates the rights of artists and songwriters to be free from illegal price-fixing by radio stations”.

Meanwhile Azoff himself said: “Today is a great day for artists, who have been bullied by the RMLC since the dawn of the modern radio industry. Advocating on behalf of artists is our founding principle, and we refused to allow this unfair status quo to continue. We believe the days of this brazen, long-running cartel are now numbered. GMR has never been prouder to stand with songwriters to fight back”.

It remains to be seen how the RMLC responds to the DoJ’s intervention, and then what position the judge hearing the case takes. A full hearing of the GMR v RMLC dispute in the Californian courts is scheduled for next November.