ASCAP Pays $1.75 Million to Settle DoJ Investigation
The U.S. Department of Justice announced on Thursday that the American Society of Composers, Authors and Publishers (ASCAP) has agreed to pay $1.75 million to settle allegations that they had engaged in anti-competitive practices in violation of a court order.
According to DoJ, ASCAP signed contracts with approximately 150 songwriters and publisher members that made ASCAP the exclusive licensor of their performance rights, despite provisions in a court order prohibited ASCAP from interfering with its members’ ability to directly license their songs.
As part of the settlement, ASCAP has also promised not to enter into further exclusive contracts and agreed to reform its licensing practices to remove music publishers from overseeing ASCAP’s licensing.
The DoJ also said that their investigation into the matter revealed an existing conflict in the interests of the music publishers that serve on ASCAP’s board of directors. Those publisher board members are customers of ASCAP when ASCAP licenses their performance rights and competitors of ASCAP when they seek to license their rights directly.
“By blocking members’ ability to license their songs themselves, ASCAP undermined a critical protection of competition contained in the consent decree,” said Principal Deputy Assistant Attorney General 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 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,” Hesse added.
“Settling this matter was the right thing to do for our members,” said ASCAP CEO Elizabeth Matthews in a statement announcing the settlement. “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.”