Music licensing leader settles US competition complaints
Washington (AFP) – The premier US music licensing group agreed Thursday to pay $1.75 million to settle concerns by federal investigators of anti-competitive practices in the digital age.
The Justice Department faulted ASCAP for insisting on exclusive licensing contracts in 150 instances and alleged a conflict of interest as representatives of music publishers serve on its board.
ASCAP, which stands for the American Society of Composers, Authors and Publishers, collects licensing fees from radio stations and other outlets for the use of songs and directs the revenue back to the creators.
ASCAP and its main rival Broadcast Media Inc., or BMI, operate under a 1941 arrangement with the federal government — known in legal terms as a consent decree — that sets conditions on their practices due to concerns about lack of competition.
The Justice Department launched a review after a dispute over rates between ASCAP and leading Internet radio provider Pandora.
Under the agreement, ASCAP will pay $1.75 million to the government to settle its concerns and defray the cost of the investigation.
ASCAP promised not to enter into further exclusive licensing deals, meaning that songwriters and publishers will be free to negotiate directly with Pandora or other outlets if they choose.
ASCAP also agreed to reform its setup so that music publishers on its board are not involved in licensing.
“By blocking members’ ability to license their songs themselves, ASCAP undermined a critical protection of competition contained in the consent decree,” Principal Deputy Assistant Attorney General Renata Hesse, who heads the antitrust division, said in a statement.
She said the settlement would promote “competition among the songwriters, the publishers and ASCAP.”
“This settlement also sends an important message to ASCAP and others subject to antitrust consent decrees that they must abide by the terms of the decrees or face significant consequences,” Hesse added.
ASCAP said it had never enforced the exclusivity clauses in contracts and had taken them out as part of the settlement.
The group, whose membership is made up of music professionals, said its main motivation has always been to preserve creators’ rights and livelihoods.
“Settling this matter was the right thing to do for our members,” said Elizabeth Matthews, the chief executive officer of ASCAP.
“With these issues resolved, we continue our focus on leading the way towards a more efficient, effective and transparent music licensing system and advocating for key reforms to the laws that govern music creator compensation.”