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DOJ’s DELRAHIM REBUFFS ASCAP, BMI;
THE TWO PRO CHIEFS RESPOND

In one of his final acts as the Department of Justice’s top antitrust official, Makan Delrahim has determined that it’s best to leave unchanged the consent decrees that have long governed ASCAP and BMI, despite the urging of the two PROs for modifications to the legislation, the L.A. Times reported. Delrahim announced his decision, which follows a two-year investigation, Friday in a webinar sponsored by the Vanderbilt Law School.

“Throughout the Division’s investigation, many licensees expressed the view that the decrees are largely working,” Delrahim said of his reasoning. “For many composers, songwriters and publishers, ASCAP and BMI licenses provide the most meaningful way to be compensated for the public performance of their works with respect to many categories of music users.”

ASCAP CEO Elizabeth Matthews and BMI President/CEO Mike O’Neill jointly fashioned an open letter in response to Delrahim’s decision. It can be read in its entirety below.

On Wednesday, Delrahim submitted his resignation as assistant Attorney General for the Antitrust Division. “I cherish the opportunity I had to return to the Antitrust Division these past three and a half years and to witness first-hand the dedication to law and order by the men and women of the only government agency with a moral imperative in its name, Justice,” he wrote.

The UCLA graduate joined the DOJ in 2017, moving over from the White House counsel’s office, where he’d helped in the confirmation of Supreme Court Justice Neil Gorsuch.

Delrahim had planned to step down from his post regardless of the outcome of the presidential election. He’ll soon begin teaching a course on mergers and acquisitions as a law professor.


An Open Letter from ASCAP CEO Elizabeth Matthews and BMI President and CEO Mike O’Neill in Response to the DOJ Closing Statement on the ASCAP and BMI Consent Decrees

Two years ago, the U.S. Department of Justice (DOJ) announced that it would conduct a review of the ASCAP and BMI consent decrees to determine if they still served their intended purpose. Today, the DOJ has formally closed its review and will take no action to modify or terminate the decrees but left open the possibility of changes in the future.

While we were disappointed that no action was taken, we are encouraged to see how the DOJ’s approach to these issues has evolved. In his closing remarks, AAG Makan Delrahim recognized several important truths that we have long understood: Songwriters are the backbone of the music marketplace and must be paid fairly; blanket licensing is incredibly efficient; ASCAP and BMI are innovating to serve the needs of the industry; greater competition and not compulsory licensing is the answer; and the value of music is best decided in a free market.

While BMI and ASCAP have long advocated for updating and modernizing our consent decrees, it has become clear over the course of two different reviews by two different DOJ administrations in the past eight years that modifying or terminating our decrees would be extremely challenging.

This latest review was part of a broader effort by the DOJ to examine many of the nation’s oldest consent decrees and to terminate those that no longer served their intended purposes. When faced with that possibility, ASCAP and BMI joined together and put forth a proposal to the DOJ and the industry that would help facilitate a thoughtful transition to a free market while avoiding potential chaos in the marketplace.

We knew that reaching consensus would not be easy. It soon became clear that key industry participants could not agree on how best to move forward. Unfortunately, we also found that some were using this review to advocate for even greater restrictions in our decrees, either for their own benefit or in an effort to regulate the marketplace as a whole through BMI and ASCAP.

We were concerned that the lack of consensus in the market could lead to a legislative push resulting in unwarranted government regulation of our industry in the form of compulsory licensing. In addition, our victory in confirming the industry-wide practice of fractional licensing would have been revisited. These factors would absolutely not be in the best interest of our songwriters, composers and publishers, and indeed, would represent a major step backward. Although it would have been wonderful to see our decrees modernized, we would rather they remain as they are than see an outcome that could adversely affect music creators for generations to come.

The formal close of this review means we can put this matter behind us for the near future and continue to champion the rights of our songwriters, composers and publishers, protect the value of their creative work and partner with our licensees to help ensure music is delivered to the public.

It’s important to remember that BMI and ASCAP have operated with consent decrees for over 80 years, and that has not prevented us from innovating along with our changing marketplace. We recently joined together to launch the Songview data platform in order to respond to a growing industry need to provide greater transparency around copyright-ownership shares. We appreciate the DOJ’s support of this initiative. In addition, we have each independently experimented with new forms of licenses, and we successfully advocated for provisions in the Music Modernization Act that will drive fairer negotiations and allow the introduction of more marketplace-pricing evidence in rate-court proceedings. Whether we operate under consent decrees or not, that spirit of innovation and focus on continual improvement will never change.

Again, although we were disappointed no changes were made, we would like to thank Makan Delrahim, Assistant Attorney General, Antitrust Division, for his attention and efforts throughout this review as he evaluated the best way to move our industry towards a free market. We would also like to thank the many ASCAP and BMI songwriters and composers who shared their views with the DOJ.

While we are both looking forward to the day when ASCAP and BMI are no longer under consent decrees, we were buoyed by the DOJ’s comments that it will pay to revisit these decrees as a result of new market developments. When the appropriate time comes, BMI or ASCAP may wish to seek a future review.

For now, we’ll turn our attention to the opportunities that lie ahead in 2021 and, of course, all of the incredible new music the year will bring.

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