Lenard and White to DOJ: Ending Consent Decrees Will Benefit Consumers and Music Industry

Lenard and White to DOJ: Ending Consent Decrees Will Benefit Consumers and Music Industry

WASHINGTON (August 14) The U.S. Department of Justice is reviewing the 1941 Consent Decrees resolving the historic antitrust case brought by the government against ASCAP and BMI under the Sherman Act. The two decrees responded to the market power the two organizations amassed by aggregating the performance rights of their members, primarily songwriters and publishers.

Tom Lenard, senior fellow and president emeritus of the Technology Policy Institute, and NYU Stern School Professor Lawrence White have filed detailed public comments with the DOJ citing huge changes in the marketplace and technology since 1941, and explaining why terminating the consent decrees would be pro-competitive and serve the public interest.

“Music distribution has changed significantly between 1941 and 2019,” Lenard and White write in their DOJ filing. “The ASCAP and BMI consent decrees may hinder rather than help pro-competitive policy goals in the creation and distribution of cloud-based media content in the near future.”

“The Antitrust Division would serve the public interest by terminating the decrees, with careful review of the process of transition and the development of comprehensive music ownership databases,” they conclude.

In the digital era, with 75 percent of revenues coming from streaming services and another 11 percent from downloads, Lenard and White say “any benefits from the consent decrees are likely outweighed by costs.” They predict that ending the decrees would encourage more direct bargaining and negotiations-and thus competition-among the parties involved.

Saying that the continued reliance on current collective licensing and blanket licenses reduces the incentives to develop a centralized database, Lenard and White suggest the Antitrust Division should “announce its commitment to terminate the decrees within a period that is sufficient to expect that a comprehensive centralized database will be in existence or that the parties will figure out some way around that problem.”

Contact: David Fish, 571-389-4446, [email protected]

The Technology Policy Institute

The Technology Policy Institute is a non-profit research and educational organization that focuses on the economics of innovation, technological change, and related regulation in the United States and around the world. More information is available at https://techpolicyinstitute.org/

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