Public performance licensing of music is a well-known issue for anyone who operates a small restaurant or bar. Playing or listening to a song, something that seems so ordinary in everyday life and that most consumers wouldn’t give a second thought about, is suddenly something for which the owner/operator of a small restaurant or bar might now be liable for copyright infringement if proper licensing is not in place. Such licensing and the rates to do so have long been controlled under various antitrust consent decrees between the Department of Justice and the two biggest performing rights organizations, ASCAP and BMI. In the 1940s, ASCAP and BMI came under scrutiny for anti-competitive and unfair licensing practices, and the antitrust consent decrees have been in place ever since to protect music licensees.
As recently as 2016, the DOJ had insisted that the antitrust consent decrees were still needed to protect music licensees from potential abuses, and even reinterpreted the decrees to require 100% “full work” licensing. BMI challenged the 100% “full work” licensing requirement in court, arguing that their consent decrees allow for fractional licensing. BMI won the case at the district court and appeals court levels, and the DOJ has since declined to take the case to the US Supreme Court. This means that fractional licensing stands, and a small restaurant or bar might have to buy licenses from multiple performing rights organizations or other copyright owners to obtain full protection from copyright infringement on any given song they choose to play.
As if this were not burden enough, the DOJ is now reviewing all of the ASCAP and BMI antitrust consent decrees to see if they are still relevant in today’s marketplace. Any consent decrees deem irrelevant will be terminated, potentially allowing ASCAP and BMI to resume anti-competitive and unfair practices. If the consent decrees are terminated, public performance licensing will be thrown into further disarray, and the last shreds of certainty in music licensing will go right out the window.
The man leading DOJ’s review of these consent decrees, US Assistant Attorney General Makan Delrahim, is scheduled to be the keynote speaker at the National Music Publishers’ Association annual meeting on June 13, 2018. That address is sure to provide some illumination on the future of the consent decrees. In the meantime, concerned restaurant and bar operators can make their opinions known to the DOJ by signing onto the National Restaurant Association’s letter advocating for keeping the consent decrees in place. At Siegel, O’Connor, O’Donnell & Beck, P.C., we provide a wide range of legal advice and services to Connecticut restaurant and bar operators, and we want you to be informed about important legal issues effecting your business.