ASCAP Settles With Justice Department for $1.75 Million Over Exclusive Contracts

Courtesy of ASCAP

The American Society of Composers, Authors and Publishers will pay $1.75 million to settle a Department of Justice civil contempt claim over 150 contracts the performing rights organization entered into with songwriters and publishers for exclusive licensing rights to their works.

The settlement, announced on Thursday, stems from the DOJ’s claim that ASCAP violated a 75-year-old consent decree that prohibits it from entering into exclusive agreements.

“By blocking members’ ability to license their songs themselves, ASCAP undermined a critical protection of competition contained in the consent decree,” said 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 — through ASCAP’s blanket license of through direct negotiations with individual songwriters and publishers.”

ASCAP did not admit wrongdoing, but said that the exclusivity provisions were never enforced and have been removed from all agreements.

Elizabeth Matthews, CEO of ASCAP, said in a statement that the settlement “was the right thing to do for our members. With these issues resolved, we continue our focus on leading the way towards a more efficient, effective and transparent music licensing system and advocating for key reforms to the laws that govern music creator compensation.”

The DOJ said that its investigation revealed a “conflict in the interests” of music publishers who serve on ASCAP’s board of directors. The board members are customers of ASCAP when the organization licenses their works, but also competitors when they seek to license their rights directly. As part of the settlement, publisher board members must not participate in ASCAP licensing activities.

ASCAP has been subject to the consent decree since 1941, after federal authorities brought an antitrust lawsuit over price fixing. ASCAP and another performing rights organization, BMI, which is also subject to the decree, have been advocating for changes that they say would better reflect the digital marketplace.

The settlement still must be approved by a federal rate court judge.