ASCAP has agreed to pay $1.75 million and change “certain practices” to settle a civil contempt complaint filed by the Justice Department.
The music licensing organization had pledged in a consent decree to allow members to directly license their songs, but the Justice Dept. said that it had violated that agreement by entering into 150 or so contracts with songwriters and publishers that made ASCAP the exclusive licensing agent for their performance rights.
“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, the new head of the Justice Department’s antitrust division.
ASCAP has also agreed to end music publisher board member involvement in licensing activities after the Justice Dept. concluded, in investigating the consent decree violation, that it was a conflict of interest given that “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.”
“Settling this matter was the right thing to do for our members,” said ASCAP CEO Elizabeth Matthews in a statement. “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.”
ASCAP has been subject to consent decrees since 1941, when the Justice Dept. alleged it was fixing prices. Among its conditions was one preventing ASCAP “from entering into exclusive contracts with songwriters or music publishers or otherwise impeding direct licensing so that music users retain the ability to seek licenses directly from songwriters or music publishers.”
As part of the settlement, ASCAP has to agree to a compliance regime to prevent a repeat of the alleged violation.
— Broadcasting & Cable