One of the 115th Congress’s proudest moments was the passage of the Music Modernization Act (MMA). Few bills pass both the House of Representatives and the Senate unanimously, but in this case, Republicans and Democrats were willing and eager to protect musicians and businesses that seek to play music by simplifying the licensing process. By all accounts, the bill amounted to a resounding success. Unfortunately, however, a recent announcement from the Antitrust Division within the DOJ has some of the MMA’s biggest champions concerned that the improvements Congress made to the music licensing marketplace could be short-lived.
On July 28 and 29, the Antitrust Division will hold a series of panels to discuss competition in the licensing of public performance rights in the music industry. The event will focus largely on whether the antitrust consent decrees that govern the two largest music collectives are “inhibiting” the industry. This discussion is part of the Antitrust Division’s review of whether to maintain these consumer protections or ease them. Congress authored the MMA under the expectation that these decrees would remain in place as-is. As a former attorney in the Antitrust Division who studied these decrees at length, I believe that weakening or eliminating them would disrupt the entire marketplace’s functionality and undercut the reforms that Congress passed on a bipartisan basis through the MMA.
ASCAP and BMI are Performing Rights Organizations (PROs) – entities that license performing rights to the businesses which publicly perform music, including restaurants, retail stores, coffee shops, TV and radio broadcasters, and digital services like Spotify. Comprised of otherwise competing music publishers, these two organizations license 90-percent of all available music. Absent the decrees, competing music publishers banding together under the ASCAP and BMI banners would be not only harmful to consumers; it would also be illegal under the Sherman and Clayton Antitrust Acts.
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The consent decrees provide safety rails to protect consumers and provide efficiencies for both businesses and music creators alike. Like the licensing system Congress created within the MMA for digital services, these antitrust remedies allow businesses to play everything within ASCAP and BMI’s repertoires by purchasing one blanket license.
Without the stability created by these decrees, the MMA would not have been possible. Businesses would continue to struggle to purchase the licenses they need, and performers would consequently have fewer places for their music to be heard. That’s why Congress, along with veterans of the DOJ’s Antitrust Division like me, was so puzzled that, less than two weeks after the House passed the MMA, the Antitrust Division began a Judgement Termination Program into the many consent decrees it manages. Perplexingly, the ASCAP and BMI decrees quickly became a focal point of its review process. This examination into their effectiveness occurred despite a recent and significant DOJ fine brought against ASCAP for predatory behavior, and irrespective of the fact that the Antitrust Division just completed a multi-year review of the ASCAP and BMI decrees in 2016, determining nothing about them should change.
For these reasons, then-House Chairman Bob Goodlatte, Senate Judiciary Chairman Chuck Grassley (R-Iowa), and House and Senate Judiciary Ranking Members Jerrold Nadler (D-N.Y.) and Dianne Feinstein (D-Calif.) sent a letter to the Justice Department’s Antitrust Division expressing concerns. In the letter, they made clear that, “destabilization of the music marketplace” through altering the decrees “would undermine our efforts on the Music Modernization Act.” Before the MMA passed the Senate, they also made sure to include language that ensured Congress would have more input into the DOJ’s review process in an abundance of caution.
Two full years have come and gone, and yet the DOJ is still reviewing the ASCAP and BMI decrees. Its recent announcement of an upcoming public workshop on the issue has only magnified the concerns previously expressed during the initiation of the Termination Program over the possibility that the Department may make significant changes to them.
AG Barr must recognize that weakening these decrees will not only harm musicians and businesses, but it would also compromise many of the benefits created by one of the most significant bipartisan congressional achievements in a generation. In the present day’s divided political climate, that is an outcome that everyone should want to avoid. Barr and his Antitrust Division should take a stand for bipartisanship by deciding against weakening these decrees.
David Balto is a public interest antitrust attorney based in Washington, D.C. He previously served as policy director at the Federal Trade Commission and as an attorney in the Justice Department's Antitrust Division. He is an expert in antitrust, consumer protection, and, intellectual property
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