The Consent Decrees Governing ASCAP and BMI are Vital to Maintaining a Fair, Efficient and Competitive Music Licensing System

In order to fully appreciate the important role that the antitrust consent decrees governing the American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music Inc. (BMI) play in maintaining a fair and efficient music licensing system, it’s essential to understand the basic operations of a performing rights organization — also known as a “PRO.”

Fundamentally, PROs serve as middlemen between thousands of small and large businesses located throughout the U.S. and representatives of the songwriting community. They collect licensing fees from businesses that play music in their establishments, over the airwaves and the internet, and distribute those royalties to music publishers and their songwriter affiliates.

The consent decrees governing ASCAP and BMI were the byproduct of violations of federal antitrust law carried out by each organization that resulted in the Department of Justice (DOJ) separately suing each PRO several decades ago. Back then, as is the case now, the PROs asserted significant power over the music marketplace, which, if left unchecked, could result in major antitrust harms to music users and consumers.

With the scales heavily tilted in favor of the PROs, the DOJ took action. The resulting consent decrees ensured that everyone would have fair access to the PROs’ extensive musical repertoires. In other words, the consent decrees were the government’s way of addressing anticompetitive behavior without tearing apart the music licensing industry.

In a market like the music industry, where concentrating all the musical works under a few organizations makes licensing efficient but also prone to anti-competitive practices, consent decrees help prevent potentially abusive behavior.

Although the consent decrees governing each PRO have been updated and amended on multiple occasions over the past few decades, the protections they provide have been foundational to building America’s modern music marketplace. So why do they matter?

The simple answer is they help to promote fairness and efficiency that benefits the entire music ecosystem. The Antitrust Division of DOJ in both the Obama and Trump Administrations conducted thorough reviews of both decrees and reached this conclusion. They chose to preserve the decrees to maintain a functioning music marketplace.

For music licensees like venues, music streaming services, and broadcasters, efficient access to a PRO’s entire catalog at a fair price is critical. Given the volume of music they play, most do not have an alternative to using repertoire-wide or “blanket” licenses offered by PROs. As a result of the consent decrees, both PROs offer blanket licenses that make efficient access to a PRO’s entire musical repertoires possible.

Not only do the consent decrees safeguard competition, but they also prevent individual copyright owners from holding songs “hostage.” Consent decrees prohibit exclusive licensing on the part of ASCAP or BMI.

Across the board, the ASCAP and BMI consent decrees have been a key resource for protecting competition and music users, making sure that the beat goes on.

Where can I learn more?

For more information about the music licensing ecosystem, be sure to visit us at mic-coalition.org.

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