Justice Department to Review Music Royalties Decrees

The Department of Justice will conduct a review of the 73-year-old consent decrees that govern how music rights organizations set rates for licensing songs.

ASCAP and BMI have been pushing the DOJ to revise — or even abolish — the consent decree, first entered into in 1941 as part of antitrust cases, by arguing that the changing face of the industry makes significant changes necessary. ASCAP has been engaged in a protracted dispute with Pandora over the royalty rates paid to songwriters, and a federal judge largely ruled in favor of the streaming music service earlier this year.

“Since the ASCAP decree was last reviewed in 2001 — before even the iPod was introduced — new technologies have dramatically transformed the way people listen to music,” said Paul Williams, president and chairman of ASCAP. “ASCAP members’ music is now enjoyed by more people, in more places, and on more devices than ever before. But the system for determining how songwriters and composers are compensated has not kept pace, making it increasingly difficult for music creators to earn a living.”

The DOJ’s review comes amid increasing rumblings that music copyright laws need a significant overhaul. The House Judiciary Committee has been holding hearings on major revisions to the Copyright Act, but it is expected to take years.

The Recording Industry Assn. of America, meanwhile, is backing legislation that would require digital services like Pandora and SiriusXM to pay artists and labels when they play recordings made before 1972. That is the year when sound recordings were placed under federal copyright. The RIAA, however, has lawsuits against Pandora in New York and SiriusXM in California, seeking royalties under state laws.

The DOJ will take public comment until Aug. 6 on whether the consent decrees “continue to protect competition.” Among the issues are whether there the federal rate court should be replaced with an arbitration system to settle fee disputes. Another is whether music publishers should be allowed to grant limited rights to ASCAP or BMI so they could negotiate potentially better deals in private agreements with streaming companies.

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