ASCAP Settles DOJ Investigation on Consent Decree Violations for $1.75 Million Fine

The American Society for Composers, Authors and Publishers reached a proposed settlement Thursday with DOJ that ends the department’s investigation into whether the performing rights organization (PRO) was violating its 1941 consent decree by signing about 150 contracts with songwriters and music publishers that made ASCAP their exclusive licensor for performances. Justice’s consent decree prohibits ASCAP from interfering with its members’ ability to directly license their songs. The department began its investigation in 2013 while ASCAP was settling its rate-setting proceeding with Pandora in the U.S. District Court in New York. U.S. District Judge Denise Cote said then that Pandora had a right to perform all compositions in ASCAP’s repertory (see report in the March 17, 2014, issue). Justice is reviewing both the ASCAP consent decree and a separate consent decree with PRO Broadcast Music Inc. Justice filed the proposed settlement Thursday in the U.S. District Court in New York City in conjunction with a petition for the district court to hold ASCAP in civil contempt for violating its consent decree. ASCAP agreed to pay a $1.75 million fine but didn’t admit any wrongdoing related to DOJ’s allegations. ASCAP promised to not sign any further exclusive contracts with its members and will reform its licensing practices so they don’t allow music publishers to oversee ASCAP licensing. The proposed settlement also requires ASCAP to improve its consent decree compliance program to minimize the likelihood it will violate the consent decree in the future, Justice said. “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 Hesse, head of DOJ’s Antitrust Division, in a news release. “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.” The settlement “was the right thing to do for our members," said ASCAP CEO Elizabeth Matthews in a news release. "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.”