SCAP and BMI Consent Decrees

Statement of the Department of Justice on the Closing of the Antitrust Division’s Review of the ASCAP and BMI Consent Decrees

11 Aug 2016

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The American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music, Inc. (BMI) are “performing rights organizations” (PROs) . PROs provide licenses to users such as bar owners, television and radio stations, and internet music distributors that allow them to publicly perform the musical works of the PROs’ thousands of songwriter and music publisher members. These “blanket licenses” enable music users to immediately obtain access to millions of songs without resorting to individualized licensing determinations or negotiations. But because a blanket license provides at a single price the rights to play many separately owned and competing songs – a practice that risks lessening competition – ASCAP and BMI have long raised antitrust concerns.
 
ASCAP and BMI are subject to consent decrees that resolved antitrust lawsuits brought by the United States in 1941 alleging that each organization had unlawfully exercised market
power acquired through the aggregation of public performance rights in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. The consent decrees seek to prevent the anticompetitive exercise of market power while preserving the transformative benefits of blanket licensing. In the decades since the ASCAP and BMI consent decrees were entered, industry participants have benefited from the “unplanned, rapid and indemnified access” to the vast repertories of songs that each PRO’s blanket licenses make available. Broadcast Music, Inc. v. CBS , Inc., 441 U.S. 1,20 (1979).
 
At the request of ASCAP and BMI, in 2014 the Antitrust Division of the U.S. Department of Justice opened an inquiry into the operation and effectiveness of the consent decrees. In the course of the Division’s investigation, the Division solicited two rounds of public comments regarding the consent decrees and met with dozens of industry stakeholders. The Division evaluated during its investigation whether various modifications to the consent decrees requested by stakeholders were necessary to account for changes in how music is consumed today.
 
During the discussions surrounding these requested modifications, it became apparent that industry participants had differing understandings of whether the PROs’ licenses provide licensees the ability to publicly perform, without risk of copyright infringement, all of the works in each of the PROs’ repertories. The requests for modifications therefore required the Division to examine the question of whether the consent decrees obligate ASCAP and BMI to offer “full – work” licenses.
 
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