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ASCAP FINED $1.75M IN DOJ SETTLEMENT

ASCAP has agreed to pay $1.75 million and reform certain practices to settle allegations that the performing rights organization violated a court-ordered consent decree designed to prevent anti-competitive effects.

In violation of  the consent decree, ASCAP entered into approximately 150 contracts with songwriter and publisher members that made ASCAP the exclusive licensor of their performance rights. As part of a settlement with the Justice Department, ASCAP has promised to ban exclusive contracts and will reform its licensing practices to remove music publishers from overseeing ASCAP’s licensing.

 “By blocking members’ ability to license their songs themselves, ASCAP undermined a critical protection of competition contained in the consent decree,” said Principal Deputy Assistant Attorney General Renata B. Hesse, head of the Justice Department’s Antitrust Division.  “The Supreme Court said that ASCAP’s consent decree is supposed to provide music users with a ‘real choice’ in how they can access the millions of songs in ASCAP’s repertory.  … 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.”

The Department of Justice’s Antitrust Division filed a petition in the U.S. District Court for the Southern District of New York to have ASCAP held in civil contempt for violating the consent decree.  At the same time, the department filed a proposed settlement agreement and order that, if approved by the court, would resolve the department’s concerns.

The settlement comes at a time when publishers and the songwriting community are questioning the lack of transparency within the PROs and the lack of creative executives running the organizations. Could this $2.5b industry be in for a shakeup? Stay tuned.

 

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