Potential Legal Issues in Terminating the ASCAP and BMI Decrees

Posted by Social Science Research Network

Potential Legal Issues in Terminating the ASCAP and BMI Decrees

By Allen P. Grunes & Maurice E. Stucke

This paper addresses some of the likely challenges that the DOJ would face should it seek to terminate the ASCAP and BMI consent decrees.

In Part I, we provide some background on ASCAP and BMI, the consent decrees, and market structure. In Part II, we discuss how these two decrees have become an important part of the legal scaffolding for licensing music over the past 70 years.

Given the important role the decrees have played in mitigating the antitrust risks from ASCAP and BMI while promoting the efficiencies from collective licensing, Part III examines the legal standard the federal court would likely apply in determining whether to terminate the decrees. One problem is that if the ASCAP and BMI consent decrees were terminated, the duopoly would remain, and licensees and consumers would bear the risk of unduly restrictive anticompetitive practices. A second problem is the difficulties the DOJ would likely face in convincing the court that terminating the decrees would benefit the public, given that it reached the opposite conclusion a couple of years ago. Moreover, the concerns the DOJ heard during its review process from licensees, such as Netflix, Pandora, and religious broadcasters, would undercut the argument that the public would somehow benefit from the decrees’ termination.

Part IV examines the interplay betw


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