DOJ Opens New Review of ASCAP and BMI Consent Decrees and Sets July 10 Deadline for Public Comment

Intellectual Property Alert | June.06.2019

On June 5, 2019, the Department of Justice announced its opening of a formal review of the antitrust consent decrees that have regulated music performance licensing by ASCAP and BMI since the 1940s. In its announcement, the DOJ described the purpose of its review as "to determine whether the decrees should be maintained in their current form, modified, or terminated." Those consent decrees provide crucial protections for businesses that must license music performance rights, including music and video streaming services, broadcasters, bars, restaurants, hotels, concert venues, symphony orchestras, retail establishments, and many others who play recorded or live music in connection with their businesses. Modification or termination of the consent decrees, and the resulting diminution or loss of these crucial protections, would have a profound adverse impact on these businesses.

As part of the review process, the DOJ has posted an invitation for public comment on various issues relating to the ASCAP and BMI consent decrees and set a short deadline of July 10, 2019, for submissions by any impacted stakeholders. Those issues are:

  • Do the Consent Decrees continue to serve important competitive purposes today? Why or why not? Are there provisions that are no longer necessary to protect competition? Which ones and why? Are there provisions that are ineffective in protecting competition? Which ones and why?
  • What, if any, modifications to the Consent Decrees would enhance competition and efficiency?
  • Would termination of the Consent Decrees serve the public interest? If so, should termination be immediate or should there instead be a sunset period? What, if any, modifications to the Consent Decrees would provide an efficient transitionary period before any decree termination?
  • Do differences between the two Consent Decrees adversely affect competition?  How?
  • Are there differences between ASCAP/BMI and PROs that are not subject to the Consent Decrees that adversely affect competition?
  • Are existing antitrust statutes and applicable caselaw sufficient to protect competition in the absence of the Consent Decrees?

Notably, the DOJ very recently (in 2014 through 2016) conducted a thorough review of the very same consent decrees, and after multiple rounds of written submissions and meetings with various stakeholders, it issued a comprehensive determination that the consent decrees were still necessary to protect competition and that no modifications were warranted at that time. It is difficult to discern what could have changed in the less than three years since the DOJ issued its prior determination that would warrant an entire new review process covering the exact same issues. Nonetheless, the potential harm to music licensees from this review is significant, and there is limited time to have your voice heard by the DOJ. Any potentially impacted companies with questions or concerns regarding this development are welcome to contact Paul Fakler, who has deep experience in these matters.

DOJ Announcement: https://www.justice.gov/opa/pr/department-justice-opens-review-ascap-and-bmi-consent-decrees

DOJ Request for Public Comment: https://www.justice.gov/atr/antitrust-consent-decree-review-ascap-and-bmi-2019