The Department of Justice has sent out civil investigative demands (CID's) for documents out to ASCAP, BMI, Sony/ATV and Universal Music—all major music publishing groups—as part of a review of consent decrees that at least the first two groups work under. Music law buffs suggest that this also suggests that the DOJ may bring allegations of coordination against the various publishers, an act that would violate U.S. antitrust laws.
The initial review of the publishers' actions began with the rate trial against Pandora, one of several internet radio services that are grinding up against the majors in order to settle streaming rates. Pandora's representatives alleged that the labels had been working together to change bylaws within ASCAP and BMI that would allow for partial withdrawals—in other words selling the rights to play all of your catalogue aside from the biggest draws, so that publishers can charge higher rates for a Rihanna than a Raekwon, for example. Judge Denise Cote agreed with Pandora in her decision.
"Because their interests were aligned against Pandora, and they coordinated their activities with respect to Pandora, the very considerable market power that each of them holds individually was magnified," she wrote.
If the Justice Department concurs that competing publishers have been colluding, that will most likely result in tighter consent decrees, which is a bad thing for the publishers, who would rather looser restrictions so that they can at least attempt partial withdrawal schemes.
Stay tuned.
