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ASCAP and BMI Consent Decree Review Request for Public Comments 2015

American Society of Composers, Authors and Publishers/Broadcast Music, Inc.

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Antitrust Division Requests Comments on PRO Licensing of Jointly Owned Works

In 2014, the U.S. Department of Justice, Antitrust Division, examined the operation and effectiveness of the Final Judgments in United States v. ASCAP, 41 Civ. 1395 (S.D.N.Y.), and United States v. BMI, 64 Civ. 3787 (S.D.N.Y.) (“Consent Decrees”), and solicited public comments regarding several potential modifications to the Consent Decrees. In the course of this process, industry stakeholders recommended additional modifications regarding ASCAP’s and BMI’s licensing practices related to jointly owned works. Such proposals also have implications for proposed Consent Decree modifications to provide for “partial withdrawal” or “partial grants of rights.”

Accordingly, in 2015, the Antitrust Division invited interested persons, including songwriters and composers, publishers, licensees, and service providers, to provide the Division with information or comments relevant to the questions described below.

ASCAP’s and BMI’s licensing practices suggest that each organization has historically provided licenses entitling users to play all works in their repertories, whether partially or fully owned. For example:

  • The organizations’ licenses grant users the rights to play works, not interests in works. For example, BMI’s model license for bars and restaurants promises “[a]ccess to more than 7.5 million musical works” and grants to the user “a non-exclusive license to publicly perform . . . all of the musical works of which BMI controls the rights to grant public performance licenses during the Term.” Similarly, ASCAP’s Business Blanket License grants the right to perform “non-dramatic renditions of the separate musical compositions now or hereafter during the term of this Agreement in the repertory of SOCIETY, and of which SOCIETY shall have the right to license such performing rights.”

  • ASCAP and BMI often describe their products in ways that would be inconsistent with a license that provided something other than the right to play all works represented in their repertories. For example, in its submission to the Antitrust Division in response to the 2014 request for comments, ASCAP explained: “Licensees are, through a single license with a single entity, authorized to perform any or all of the millions of songs in ASCAP’s repertory (including additional songs that enter the repertory during the term of the license and countless foreign works). Without ASCAP and other PROs, music users that perform more than a handful of musical works would face the prohibitive expense of countless negotiations with a multitude of copyright owners.” In its own submission, BMI noted that “[u]nder the BMI decree, upon written request for a license, a licensee has an automatic right to use any, some, or all of BMI’s music.”

  • The Consent Decrees themselves describe ASCAP’s and BMI’s licenses as conveying the rights to play all works in each organization’s repertory. The ASCAP decree requires ASCAP to “grant to any music user making a written request therefor a non-exclusive license to perform all of the works in the ASCAP repertory . . . .” The BMI decree describes BMI’s licenses as providing access to “those compositions, the right of public performance of which [BMI] has or hereafter shall have the right to license or sublicense.” The Second Circuit’s 2015 Pandora decision states that ASCAP is “required to license its entire repertory to all eligible users.”

Notwithstanding this, the historical practice by which ASCAP and BMI have made and accepted payments has been based on the fractional interest each copyright owner holds in works. Moreover, ASCAP and BMI pay only their own members, and do not “account” to members of other performing rights organizations. These practices cause some rightsholders to question whether the organizations’ licenses have in fact conveyed the right to play partially owned works.

Taking into consideration the foregoing, the Antitrust Division requested that the public comment on the following issues:

  • Have the licenses ASCAP and BMI historically sold to users provided the right to play all the works in each organization’s respective repertory (whether wholly or partially owned)?

  • If the blanket licenses have not provided users the right to play the works in the repertories, what have the licenses provided?

  • Have there been instances in which a user who entered a license with only one PRO, intending to publicly perform only that PRO’s works, was subject to a copyright infringement action by another PRO or rightsholder?

  • Assuming the Consent Decrees currently require ASCAP and BMI to offer full-work licenses, should the Consent Decrees be modified to permit or require ASCAP and BMI to offer licenses that require users to obtain licenses from all joint owners of a work?

  • If ASCAP and BMI were to offer licenses that do not entitle users to play partially owned works, how (if at all) would the public interest be served by modifying the Consent Decrees to permit ASCAP and BMI to accept partial grants of rights from music publishers under which the PROs can license a publisher’s rights to some users but not to others?

  • What, if any, rationale is there for ASCAP and BMI to engage in joint price setting if their licenses do not provide immediate access to all of the works in their repertories?

Comments from the public were due by November 20, 2015 and are posted in their entirety for public review.

Updated August 4, 2016