DOJ Won't Take Action on Music Licensing Consent Decrees

RADIO ONLINE | Friday, January 15, 2021

Department of Justice

Speaking at the Vanderbilt University Law School on Friday, U.S. Assistant Attorney General Makan Delrahim said the Department of Justice's Antitrust Division will not take action on the Consent Decrees the U.S. government entered into with ASCAP and BMI. He told the audience, "The ASCAP and BMI consent decrees should be reviewed every five years, to assess whether the decrees continue to achieve their objective to protect competition and whether modifications to the decrees are appropriate in light of changes in technology and the music industry."

"The earliest versions of the decrees date from 1941, a time when most Americans listened to music through the radio or on phonograph players. There were no cassette tapes, no CDs. The term 'digital streaming' would have been complete gibberish. The most recent modifications to the decrees occurred in 1994 (for BMI) and 2001 (for ASCAP). The ASCAP and BMI consent decrees, some critics argue, fail to reflect the way Americans consume music today. Some critics also assert that the decrees discourage innovation by locking in existing practices and licensing terms. According to these critics, the decrees prevent ASCAP and BMI from experimenting with innovative licensing terms to assess whether new or different terms would foster competition. Moreover, the decrees regulate only ASCAP and BMI, leaving other PROs free to operate without the same constraints," he said.

In the speech, Delrahim stressed the Antitrust Division's position that the decrees should continue for now offered three "guiding principles" for review, including ultimately relying on a market-based solution for compensation rather than the decrees, ensuring that the regulated market fairly compensate rights holders, and "the recognition that compulsory licensing is not the answer."

In a statement, NAB President/CEO Gordon Smith said, "NAB is very pleased that the Department of Justice will not move to make changes to the ASCAP and BMI consent decrees. We appreciate the willingness of DOJ to have an open mind and to conduct a comprehensive review of all of the possible issues raised by stakeholders concerning modifying or eliminating the decrees. 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."