How Two Very Different Presidencies Found Common Ground on the Music Monopolies

They say music is the soundtrack of our lives. It’s also big business with livelihoods depending on it. Just days before leaving office, the Trump Department of Justice did exactly what the Obama DOJ did in its final year on the job. It stood up for performers, music consumers, and small businesses by rejecting a lobbying push to weaken the 80-year-old antitrust restraints that ensure fair-market pricing and the accessibility of music in the industry.

Two music monopolies, ASCAP and BMI, control over 90 percent of the music industry’s copyright rights. They obtained this market share after music publishers — which otherwise compete with one another — joined forces, seemingly to increase prices and their market leverage. As a result of this collusion, every restaurant, coffee shop, music venue, bar, and pub that wishes to play music must first obtain performing licensing rights from ASCAP and BMI.

In 1941 the DOJ put ASCAP and BMI under consent decrees following accusations they engaged in price-gouging. The decrees they ultimately agreed to prevent them from strong-arming venues into paying unreasonable rates by requiring the two monopolies to provide one single, fairly-priced license to all businesses. They ensure that music still gets played, businesses are not crushed by unreasonable fees, and innovation continues, even with these two entities controlling virtually all of the public performance rights marketplace.

Many industry stakeholders rely on the efficiency the consent decrees provide, allowing them to acquire the vast majority of their music licenses through two entities rather than negotiating with a bewildering array of separate rights holders. At the top of the list are songwriters, who rely on the decrees to enforce their rights on a wide scale, protecting their work and maximizing their earning capacity.

It seems that these decrees are popular with everyone except the two behemoths in question.

Undeterred by the Obama DOJ’s refusal to weaken the competitive protections of the decrees, ASCAP and BMI lobbied the Trump Justice Department to open yet another official review process into the only bulwark that these entities have against their unrestrained market power.

In an open letter to the Justice Department, the two organizations claimed that the DOJ should modify the agreements because the music industry looks dramatically different today than it did in the 1940s. It’s true we mostly don’t use record players or Walkmans anymore (though vinyl’s popularity is resurging), but these technological changes to the way we enjoy music today have nothing to do with the antitrust concerns that led to the decrees.

ASCAP and BMI still have the same market power they enjoyed during the 1940s, when the DOJ first brought antitrust claims against the monopolies. And, despite the changes in music technology and consumption, our antitrust laws still frown on competitors colluding to fix prices, the very reason for ASCAP and BMI’s existence.

Over the last two years, songwriters and Main Street businesses of all shapes and sizes pleaded with the DOJ to leave these market protections in place.

Rock and Roll Hall of Famer Jon Bon Jovi was one of them. At a DOJ forum on this issue, he said, “I am here to implore you to think about songwriters when you are discussing these rules. On behalf of all those aspiring songwriters out there, I implore you, please do not disrupt the system and change the decrees. Do nothing that can potentially harm the individual songwriter.”

Thankfully, rational minds ultimately prevailed.

Days before Trump left office, the Department of Justice listened. It decided not to modify the consent decrees, just as the Obama DOJ did after a two-year review at the end of its second term, when it found that “the consent decrees remain vital to an industry that has grown up in reliance on them.”

When two administrations with polar opposite worldviews such as the Obama and Trump administrations reach the same conclusion, there’s merit to their findings.

The win Trump’s Justice Department provided to the music industry as a whole by corroborating the Obama DOJ’s decision on the consent decrees is important. Up-and-coming performers and the cash-strapped, COVID-troubled venues that support them will live to see another day. Cities and towns across the country, such as “live music capital of the world” Austin, will retain what’s left of their performing arts identities. American consumers and creators will continue to remain protected from the impulses of the rich and powerful. There’s still work to be done to save live music venues and performers, but that’s a topic for another day.

Music may be the soundtrack of our lives. Beyond its entertainment value, music defines moments. You remember where you were and who you were with when a particular song comes on. Sometimes a song or artist — think Dolly Parton — can help unify a divided nation better than any politician can. Now that both Democratic and Republican-led DOJs have reviewed these decrees ad nauseam over the last six years, here’s hoping the Biden administration closes the book on this issue once and for all and keeps the music industry stable.

Bryan Preston is the deputy managing editor of PJ Media. He is the author of Hubble’s Revelations: The Amazing Time Machine and Its Most Important Discoveries. He’s a drummer, veteran, author, and Texan.