"Remember when the Justice Department tried to change the way ASCAP and BMI license songs and regulate songwriters more? The DOJ decided not to appeal to the Supreme Court, which means songwriters just won a huge victory!” — Conversations In Advocacy #14
ASCAP and BMI are two nonprofit performing rights organizations that songwriters rely on to help collect their royalties for public performances.
In 1941 both organizations entered into consent decrees with the Department of Justice to address antitrust concerns. Although the DOJ has periodically reviewed, and sometimes amended, the language of consent decree rulings, the bulk of the rulings have remained unchanged for over 75 years. The fact is the consent decrees have failed to keep pace with the realities of the modern music industry.
In August 2016, the DOJ completed a two-year review of the 1941 consent decree rulings, but instead of bringing forth the positive and progressive changes that many music creators hoped and expected, the DOJ ruled that ASCAP and BMI's longstanding practice of fractional licensing was in violation of the spirit of the consent decrees — despite there being no specific language in the original ruling stating this.
In contrast to the efficient, long-standing practice of fractional licensing, whereby a PRO only licenses a portion of a song for the songwriters they represent, the DOJ stated that any partial owner of a song — even a 1 percent stakeholder — would be eligible to license the full work. On top of the potential for an untold number of messy legal scenarios, the ruling arguably stifled creativity by deterring songwriters from collaborating with other writers who are not affiliated with the same PRO.
Thankfully, BMI immediately filed suit in the court that oversees their consent decree to challenge DOJ’s new interpretation, and the court ruled strongly against the DOJ's findings. But instead of backing down, the DOJ took the matter to the Second Circuit Court of Appeals — which again struck down the DOJ's argument in a unanimous decision that was reached in an almost unprecedentedly short period of time.
Since the December ruling by the Second Circuit Court of Appeals, the question has remained as to whether the DOJ would continue to press the matter through the legal system. In the interim, a cloud of uncertainty has remained over BMI and ASCAP regarding the practice. Meanwhile, on Sept. 27, 2017, Makan Delrahim was confirmed as the new assistant attorney general for the Antitrust Division of the Department of Justice, marking the potential for new leadership and a new direction for the DOJ in this matter.
On March 19, the deadline for the DOJ to file an appeal raising the issue to the U.S. Supreme Court finally passed without any appeal being filed, meaning that the Second Circuit Court's decision in favor of BMI will now stand, marking a historic victory for songwriters and the PROs.
"Conversations in Advocacy" is your weekend digital tip sheet on music advocacy and the policies that affect music makers and their craft. New installments post every Friday.
