ASCAP's Desire To End Antitrust Agreement Leads DOJ To Investigate Latest Collusion Between Music Publishers
from the look-at-that dept
The attempt to ditch the consent decree seemed especially odd, given that just months earlier, a court had called out the clear collusion by ASCAP and a bunch of music publishers to try to artificially jack up Pandora's rates. The details were a little convoluted, but basically certain publishers "withdrew" certain music from ASCAP, claiming they wanted to negotiate directly with Pandora. They didn't negotiate in good faith, and basically waited right up until the deal was about to expire. They then refused to even name what songs would no longer be covered, leaving Pandora at a very real risk of streaming songs it no longer had the right to (without even knowing which songs were being "pulled.") Because of this, Pandora was forced to sign exorbitantly high rates, which ASCAP and others then used to try to get even higher rates for others. It was clearly collusion, because while ASCAP should have been upset about publishers withdrawing music, it clearly was not. Furthermore, there were clear discussions between ASCAP and the publishers about all of this.
The end result of that case was that ASCAP lost its attempt to really jack up rates to Pandora much higher, but many people wondered how ASCAP could get away with doing that without any sort of punishment. Well... new reports say that the Justice Department is investigating ASCAP, BMI, Universal Music Publishing and Sony/ATV over possible collusion. This is being done as part of the DOJ's review of the consent decree, but ASCAP's decision to attack the consent decree right after a court called it out for collusion may backfire badly:
The CID requests are seeking documentation across a lot of particulars, including the effect of the consent decrees on rates, whether partial withdrawals of digital rights should be allowed, and plans to license other rights beyond the public performance rights that PROs handle today. However, a memo obtained by Billboard that was sent to employees by ASCAP senior VP of legal Richard Reimer began by noting that the CID is connected to the DOJs review of the consent decree. And, as a possible reminder to be careful of what you wish for, the DOJ is also investigating of alleged coordination among ASCAP, BMI, Sony/ATV Music Publishing, and Universal Music Publishing Group.In the Billboard article, the publishers and ASCAP insist they're not worried about all of this because they believe the judge in the Pandora rate setting case "got it wrong." That's quite a bit of hubris to have, given all of the evidence of collusion that was presented in that case. It seems quite possible that rather than ending the consent decree, as ASCAP and publishers would like, the DOJ may actually come down on all of them for some fairly serious antitrust problems.
That aspect of the DOJ investigation was mentioned in a note to ASCAP employees telling them to "preserve all documents, whether in paper or electronic format, on all the CID-related topics."