Contact Us


Disruptive Competition Project

655 15th St., NW

Suite 410


Washington, D.C. 20005

Phone: (202) 783-0070
Fax: (202) 783-0534

Contact Us

Please fill out this form and we will get in touch with you shortly.
Close

On Heels of DOJ Antitrust Contempt Action, Congress Told to Roll Back Antitrust Protection in Music Licensing

· May 19, 2016

Less than a week after agreeing to pay $1.75 million to the Department of Justice to settle an investigation into antitrust misconduct, the American Society of Composers, Authors and Publishers (ASCAP) was on Capitol Hill yesterday, asking lawmakers to roll back the consent decree to which the performing rights organization is bound.  

On May 12, DOJ had asked a federal court to hold ASCAP in contempt, stating that the PRO had “undermined a critical protection of competition” and violated its federal commitments.  Concurrently, DOJ and ASCAP filed a settlement relating to the alleged misconduct.  

As DisCo has previously covered, two federal courts found “troubling coordination” among ostensible competitors in the music publishing industry, which contributed to Justice’s recently concluded investigation.  The 7-figure settlement is a stark reminder of the continuing need for antitrust protections, even as Congress is being asked to relax those commitments.

The inherent opacity of who owns what, and where money goes in music licensing exacerbates efforts to achieve a more competitive music marketplace.  It’s hard for a small business to decide whether to accept or refuse an offer (or demand) to take a license when it’s incredibly difficult to reliably determine who owns what.  Transparency remains a persistent problem in music licensing.  But the ASCAP settlement focused on a more specific problem: that the PRO had, on 150 occasions, prohibited its members from licensing directly to music services and other distributors — i.e., it had prohibited cutting out the middlemen.

Just this week, I noticed a songwriter complaining on social media that while Spotify’s music analytics reported his songs were being played thousands of times, his PRO was only sending quarterly checks for a few hundred plays of one of his songs.  This is exactly the sort of problem that might make someone want to cut out the middlemen — which is why DOJ’s continued oversight remains so important.  

Competition

Some, if not all of society’s most useful innovations are the byproduct of competition. In fact, although it may sound counterintuitive, innovation often flourishes when an incumbent is threatened by a new entrant because the threat of losing users to the competition drives product improvement. The Internet and the products and companies it has enabled are no exception; companies need to constantly stay on their toes, as the next startup is ready to knock them down with a better product.

Intellectual Property

The Internet enables the free exchange of ideas and content that, in turn, promote creativity, commerce, and innovation. However, a balanced approach to copyright, trademarks, and patents is critical to this creative and entrepreneurial spirit the Internet has fostered. Consequently, it is our belief that the intellectual property system should encourage innovation, while not impeding new business models and open-source developments.