Mergers & Antitrust Law News

INSIGHT: Music Licensing Consent Decrees Critical for Hotels, Convention Centers, Stadiums

Feb. 24, 2020, 9:01 AM

The Department of Justice is reviewing music licensing consent decrees with two performance rights groups, questioning whether they are still needed. The DOJ’s decision should be simple: It should protect America’s small businesses by preserving the decrees.

The groups, the American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music Inc. (BMI), have been operating under the consent decrees since 1941 to ensure fair competition for the entire music marketplace. For more than 75 years, these decrees have governed the process by which these two organizations license rights to publicly perform musical works.

They represent about 90% of the marketplace for licensing music, making these two organizations an unavoidable destination for any hotel, bar, restaurant, convention center, or entertainment venue looking to license the right to play the latest hit song in their place of business or via a popular music service.

The importance of preserving the consent decrees is just as critical to our industries as it is to online streaming services, radio stations, and the countless other main street businesses that routinely rely on ASCAP and BMI to license the right to publicly perform music.

Checks Against Anticompetitive Behavior

Simply put, the consent decrees continue to serve as a powerful check against alleged acts of anticompetitive behavior and protect America’s restaurant, hospitality, and venue businesses both small and large alike. Moreover, by removing the protections these decrees provide, businesses can reasonably expect their expenses to increase thereby adversely affecting their ability to employ their staffs and provide services to their customers.

The need to preserve these important antitrust enforcement mechanisms is undeniable. In the absence of the current decrees, there is a strong likelihood that ASCAP and BMI would return to the questionable conduct that gave rise to the implementation of the voluntary settlement agreements several decades ago.

Indeed, just three years ago, the Justice Department settled a complaint against ASCAP for undermining a longstanding provision within its consent decree that was designed to promote competition.

Recognizing the widespread use of music at a wide range of businesses, a bipartisan group of Senators and Representatives have written to the Justice Department on multiple occasions to request that the decrees be left intact, at least until such time that Congress can develop an alternative legislative framework that would best serve the needs of all interested parties.

We firmly support this request. Making an ill-advised change to the current licensing regime could disrupt millions of small businesses across the country and disturb a U.S. economy that, by all accounts, is currently headed in the right direction.

Similar to other corporate sectors, our industries greatly benefit from increased marketplace certainty. Preserving the ASCAP and BMI consent decrees will not only give main street businesses the confidence to thrive, it will also protect them from the type of alleged anticompetitive behavior that gave rise to the voluntary agreements several decades ago.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

Author Information

Brad Mayne is president and CEO of the International Association of Venue Mangers. Prior to joining IAVM, Mayne was president and CEO of MetLife Stadium and president and CEO of Center Operating Company for 14 years.

William “Chip” Rogers is president and CEO of the American Hotel & Lodging Association. Rogers previously served as the president and CEO of the Asian American Hotel Owners Association, following a long career as a public servant in the Georgia State Assembly and Senate.

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