Earlier this month, the Department of Justice handed the music industry a major setback. Over the past weeks, the music industry has pulled out all the stops to stop Justice's decision to decline to update consent decrees that govern the licensing of music.
Even though it is tough to defend the Department of Justice on most issues, in this instance, it made the right call.
The two largest music collectives, the American Society of Composers, Authors, and Publishers and Broadcast Music, Inc. operate under antitrust consent decrees overseen by the Justice Department. These consent decrees permit ASCAP and BMI to maintain their monopolies in exchange for agreeing to and abiding by certain anticompetitive restraints.
Over two years ago, ASCAP and BMI, along with their major publisher members, petitioned the Justice Department to ease the anticompetitive protections in the consent decrees. Despite record revenues, ASCAP, BMI, and their largest publishers knew that if they could freely wield their monopoly power, they could increase fees on businesses that play music (everyone from large digital music services to local diners).
The problem facing the music industry in asking for an easing of antitrust rules was the rampant evidence of continued bad behavior. The consent decrees were born out of antitrust actions against ASCAP and BMI, and recent court decisions have underscored the continued attempts to manipulate prices through collusion and market power. In fact, just over a month ago, the Justice Department issued a hefty fine against ASCAP for violating the terms of its consent decree.
The Justice Department ultimately decided that marketplace realities dictated no change to the status quo. The Justice Department's decision not to make any changes to the consent decrees underscores the continued need for anticompetitive protections against ASCAP and BMI abuses.
However, the music industry is not taking the Justice Department decision lying down.
In a bit of a head scratcher, the music industry is now arguing that by not making any changes to the consent decrees, the Justice Department has somehow radically altered the way music is licensed. In the most politically correct terms, this argument is "spin." But when one actually takes the time to read ASCAP's and BMI's previous statements, it is evident that the industry is perpetuating an utter falsehood.
Yet ASCAP, BMI and their largest publisher continue to spread this false narrative in attacking the Justice Department's decision when word leaked out that they were inclined to keep the consent decrees in place without changes. They have enlisted their allies at the Copyright Office to support their claims (yes, the Copyright Office is now apparently weighing in on antitrust matters — talk about government expansion). Music industry supporters on the Hill are also adding their two cents. Before this decision was issued, several members of Congress sent a letter to the attorney general complaining that somehow by maintaining the status quo, the Justice Department was rewriting policy.
Again, I'm not the person most likely to step up and defend this Department of Justice, but by not changing the consent decrees the Justice Department made the right decision. By maintaining the rules that have been in place for decades, the Justice Department protected consumers from monopoly abuses and ensured stability in the market. And claims by the music industry that the Justice Department's decision represents anything beyond the status quo is nothing more than a desperate attempt to rewrite the rules at all costs, truth be damned.
Andrew Langer is president of the Institute for Liberty, a conservative public policy advocacy organization. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions.