Justice

Justice Department To Close Its Review Of ASCAP, BMI Consent Decrees

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WASHINGTON D.C. (CelebrityAccess) — Assistant U.S. Attorney General Makan Delrahim announced on Friday that the U.S. Department of Justice was ending its two-year antitrust review of the ASCAP and BMI Consent Decrees and that he plans to resign next week, one day ahead of the inauguration of President-Elect Joe Biden.

The review threatened to undo foundational elements of American music copyright that have been in place since the consent decree was imposed on the recorded music industry in 1941.

However, since then, the consent decrees have come under criticism in a number of areas, including technological advancements for music delivery such as compact discs and streaming, as well as on more technical details, such as fractional licensing and partial withdrawal.

In a statement on the decision to close the review, Delrahim acknowledged the foundational nature of the consent decrees on the recording industry, conceding, “there is significant reliance on the decrees within the licensee community.”

However, Delrahim also stated that he believes the decrees are anti-competitive, writing: “First, the ultimate goal should be a market-based solution that ensures songwriters, publishers, and other artists are compensated fully for their creative efforts at market rates. In a well-functioning, competitive market, when it comes to determining license rates and compensation, consent decrees that continue in perpetuity are not the answer. Rather, a properly functioning market is the best method for determining the rates that properly reflect supply, demand, and each party’s relative contribution to the music ecosphere. The market is also far more adaptive to changes in technology and consumer preferences than decades-old court judgments,”

“During the Department’s investigation, many stakeholders expressed the view that the competitive concerns surrounding the collective licensing of public performance rights that prompted the original ASCAP and BMI consent decrees still exist. Nevertheless, the Division recognizes that changes in the music marketplace, as well as in the ways Americans consume music, continue to require the Division to monitor the decrees and, where market realities require, seek to modify them to promote competition,” he added.

Delrahim also stated that believes that ongoing reviews of the utility of the consent decrees are important.

“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. Factors that could weigh in favor of modification might include increased competition in the licensing marketplace, including increased direct licensing or technological developments that may affect the market. In all of these efforts, competition must be the watchword. Competition for the benefit of consumers, competition for the benefit of innovation, and most importantly, competition for the benefit of the artists and songwriters without whom the American music industry would not exist.”

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