After conducting a two-year review, the Justice Department has released a ruling on music licensing consent decrees. ASCAP and BMI, two of the music industry’s largest performing right’s societies, previously asked the Justice Department for changes to the regulatory agreements that have governed the organizations for more than sixty years. Performing rights societies are responsible for collecting royalties on the behalf of songwriters when their compositions are licensed for use in public places and mediums such as digital streaming services, TV, and radio. The music licensing consent decrees were implemented in 1941 by the music industry to prevent anticompetitive effects arising from ASCAP’s and BMI’s collective licensing of music performance rights.

Songwriters wanted the Department of Justice to allow more marketplace flexibility when it comes to setting rates with digital music services, but the ruling states that the Department of Justice will not be changing how ASCAP and BMI can license music. The ruling further states that performing rights societies such as ASCAP and BMI can license 100 percent of a song for use regardless of the percentage of the song a that performing right society represents. Songwriters see this is as problematic as it will discourage songwriters from collaborating with other writers outside their own performing rights society.

Many individuals in the music industry are disappointed with the ruling as it dictates that songwriters will be unable to withdraw their catalogues from digital licensing services. In the last few years songwriters have become increasingly vocal about their unhappiness with the amount of compensation they receive from digital streaming services. They claim the ruling will continue to prevent them from being able to negotiate fair market rate payments from digital services like Spotify, Soundcloud and Apple Music.

On September 13th the advocacy group Songwriters of North America sued the Justice Department claiming the agency overstepped its authority. The suit claims the Justice Department’s ruling removes songwriters’ property rights without due process and seeks a declaration that the new ruling is unlawful. Needless to say, songwriters across the country will be following this closely.

Andrew Maloney

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