For free-market advocates, there are not many things worse than a court decree-enforced monopoly.
But there are some.
The American Society of Composers, Authors and Publishers has operated as a monopoly, thanks to a consent decree, for 75 years. ASCAP and Broadcast Music Inc. share 90 percent of the market when it comes to selling the rights to use music created by others.
Bars, restaurants, retail stores and radio stations pay a fee that allows them to play any song in the ASCAP or BMI library. And almost every song is in those libraries.
Now, ASCAP wants to change the rules. Your fee would get you almost every song in the library. Some songs would be declared so special you would have to pay extra to play them.
That such an arrangement could stay largely in place for the 75 most explosive years for music and technology in human history is a testament to the balance it has struck and which the courts seek to uphold.
ASCAP has a long history of trying to upset that apple cart.
The consent decree requires ASCAP to sell to all customers, but some of the music publishers who belong to ASCAP tried to withdraw their new media rights and negotiate directly with Pandora, which essentially sells customized radio programming.
But in 2013, a federal court ruled ASCAP had to sell a license to Pandora as it does to other customers.
In recent weeks, a federal court in New York fined the firm $1.75 million and ordered it to change some licensing practices after it discovered collusion with top publishers to sell exclusive publishing rights, again in violation of the consent decree.
Among the practices discovered was that ASCAP was sharing with its biggest members, such as Universal and Sony, information about negotiations with Pandora and others. It agreed to keep these members out of the loop during negotiations going forward and to stop giving advanced payments to publishers in exchange for exclusive rights to their music.
ASCAP said it never enforced any of its 150 exclusivity agreements and had removed the requirement on its own. The consent decree forbids such arrangements so authors and performers can go outside of ASCAP to sell their music if they wish. And this is the activity for which it was fined.
“By blocking members’ ability to license their songs themselves, ASCAP undermined a critical protection of competition contained in the consent decree,” said Renata 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 or through direct negotiations with individual songwriters and publishers. Today’s settlement restores that choice and thereby promotes competition among the songwriters, the publishers and ASCAP. 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.”
And how did ASCAP respond to this rebuke? By asking the Justice Department to change the rules to allow the very practices it just got caught doing. If your kid misses curfew, you don’t respond by eliminating curfew. You punish the bad behavior. That’s what the Justice Department has done, and it should not back down.
Which brings us back to our original question: What is worse than a court decree-enabled monopoly? What’s worse is a monopoly that attempts to create a situation where two monopoly entities it controls compete against each other.
Yes, it would mean more money for ASCAP and its members. And yes, that, in turn, would mean restaurants, bars, retail stores, etc., would pay more for music. It’s the same product, no value added to what we’re getting for current prices.
It simply would cost more because a business that has benefitted — perhaps even existed — for 75 years thanks to the protection of the courts prevails upon the Justice Department to tilt things even farther in its favor.
Elizabeth Matthews, CEO of ASCAP, said the group settled, rather than fight, in large part so it could “continue our focus on leading the way towards a more efficient, effective and transparent music licensing system and advocating for key reforms to move on to working for reforms to the laws that govern music creator compensation.”
Perhaps some reforms are in order. But not until ASCAP learns to follow the current rules.
Brian McNicoll, former senior writer for The Heritage Foundation and director of communications for the House Committee on Oversight and Government Reform, is a conservative columnist based in Reston, Va. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions.
