Can Mike Lee tame the music copyright monopolies?

At this Tuesday's antitrust oversight hearing, Senate Antitrust Subcommittee chairman Mike Lee needs to figure out what's happening with the Department of Justice's unexpected review of the antitrust oversight orders, known as consent decrees, by the music monopolies that continue to threaten consumers and the free marketplace.

Businesses can't play music, and bands can't perform live, without the purchase of blanket licenses from the American Society of Composers and Publishers (ASCAP) and Broadcast Music Inc. (BMI).  Thanks to manipulation of the government-created copyright industry, they control 90% of the licensing marketplace.  Their consent decree orders allow them to remain whole, without a government breakup.  At the same time, the decrees ban predatory business practices that could enable them to price-fix or otherwise take advantage of consumers and businesses.

Although created close to 80 years ago, these decrees are still incredibly helpful to consumers today.  For example, without the decrees, the DoJ would have never been able to come to a $1.75-million civil contempt settlement with ASCAP in 2016 for behaving inappropriately.  If the restraints weren't in place, it's also clear that ASCAP and BMI would have created much higher music consumption costs over the last decade.  We can recognize this from seeing how, shortly before the government imposed a similar order on SESAC (a small competitor of ASCAP and BMIs) in 2013, it found that the unrestrained rival's rates increased by an intolerable 32%, while ASCAP and BMI's rates declined by 40%.  The bottom line is that the decrees worked in the 1940s, and they still work now.

Unfortunately, the DoJ appears blind to this information.  On September 12, Billboard reported that not only is the DoJ thinking about loosening the restrictions, but that it is poised to make a judgment by the end of the year.  The DoJ's present involvement on this issue is sideswiping everything that the Antitrust Division and Congress have done over the last several years.

Red flags should arise when considering that the DoJ just completed a review of these same consent decrees three years ago.  That review took a full two years to complete and went through multiple comment periods, resulting in the opinion that nothing should change.  Nevertheless, for whatever reason, the DoJ is scrutinizing the decrees again, and it is seemingly rushing to make a decision.

Sen. Mike Lee has never cared so much about Big Music's political preferences or anti-conservative political actions.  However, he has taken serious issue with their anti-competitive activity.

In 2015, Mike Lee held a Senate Antitrust Subcommittee hearing, titled "How Much For a Song?: The Antitrust Decrees that Govern the Market for Music."  Recognizing the damage that their predatory behavior can pose to listeners and consumers of music, he stated, "The primary goal of this Subcommittee is to ensure that consumers are protected from those who would abuse the marketplace" and that "we're focusing on consumers of music, especially the tens of millions of Americans who enjoy their music online using streaming services."

Once the investigatory work of Lee, Congress, and the Antitrust Division concluded, the DoJ wrote that it "decided not to seek to modify the consent decrees."  Mike Lee said he "appreciate[d] the agency's thoroughness" and that "the complicated nature of the consent decrees and of the market for musical licenses require[d] such an exhaustive review" like this one.  Now, however, the DoJ is acting as if all the recent effort that everyone put into reviewing the decrees doesn't matter.

As former DoJ official Peter J. Ferrara put it, "[r]eview processes are rarely reopened this soon after closure.  Such occurrences typically mean one thing — the peddling of misinformation from stakeholders who have a hard time taking no for an answer."

The last thing Congress wants is to give the music monopolies more predatory fuel.  To prevent this, Congress included oversight language on the music consent decrees within the Music Modernization Act (MMA), which passed with unanimous consent.  Additionally, members of Congress on both the left and right have sent letters of concern to the DOJ after it announced the new music investigation, including Sens. Lindsey GrahamAmy Klobuchar, and Richard Blumenthal.  But none of this effort will matter if the antitrust committees in Congress don't approach the DoJ with the amount of aggression needed to make an impact.

Sen. Lee was a hero on this issue before, but all of that hard work will be wasted if he does not weigh in again on Tuesday at the rare gathering of his subcommittee.  With the end of the year approaching, Sen. Lee needs to question Makan Delrahim, the assistant attorney general of the Antitrust Division, and become the friend in the Legislative Branch whom music consumers can depend on once more.

Denison Smith  is a former assistant attorney general for the state of Idaho, staffer for Sen. James McClure (R-Idaho), and trustee of the Reason Foundation.

At this Tuesday's antitrust oversight hearing, Senate Antitrust Subcommittee chairman Mike Lee needs to figure out what's happening with the Department of Justice's unexpected review of the antitrust oversight orders, known as consent decrees, by the music monopolies that continue to threaten consumers and the free marketplace.

Businesses can't play music, and bands can't perform live, without the purchase of blanket licenses from the American Society of Composers and Publishers (ASCAP) and Broadcast Music Inc. (BMI).  Thanks to manipulation of the government-created copyright industry, they control 90% of the licensing marketplace.  Their consent decree orders allow them to remain whole, without a government breakup.  At the same time, the decrees ban predatory business practices that could enable them to price-fix or otherwise take advantage of consumers and businesses.

Although created close to 80 years ago, these decrees are still incredibly helpful to consumers today.  For example, without the decrees, the DoJ would have never been able to come to a $1.75-million civil contempt settlement with ASCAP in 2016 for behaving inappropriately.  If the restraints weren't in place, it's also clear that ASCAP and BMI would have created much higher music consumption costs over the last decade.  We can recognize this from seeing how, shortly before the government imposed a similar order on SESAC (a small competitor of ASCAP and BMIs) in 2013, it found that the unrestrained rival's rates increased by an intolerable 32%, while ASCAP and BMI's rates declined by 40%.  The bottom line is that the decrees worked in the 1940s, and they still work now.

Unfortunately, the DoJ appears blind to this information.  On September 12, Billboard reported that not only is the DoJ thinking about loosening the restrictions, but that it is poised to make a judgment by the end of the year.  The DoJ's present involvement on this issue is sideswiping everything that the Antitrust Division and Congress have done over the last several years.

Red flags should arise when considering that the DoJ just completed a review of these same consent decrees three years ago.  That review took a full two years to complete and went through multiple comment periods, resulting in the opinion that nothing should change.  Nevertheless, for whatever reason, the DoJ is scrutinizing the decrees again, and it is seemingly rushing to make a decision.

Sen. Mike Lee has never cared so much about Big Music's political preferences or anti-conservative political actions.  However, he has taken serious issue with their anti-competitive activity.

In 2015, Mike Lee held a Senate Antitrust Subcommittee hearing, titled "How Much For a Song?: The Antitrust Decrees that Govern the Market for Music."  Recognizing the damage that their predatory behavior can pose to listeners and consumers of music, he stated, "The primary goal of this Subcommittee is to ensure that consumers are protected from those who would abuse the marketplace" and that "we're focusing on consumers of music, especially the tens of millions of Americans who enjoy their music online using streaming services."

Once the investigatory work of Lee, Congress, and the Antitrust Division concluded, the DoJ wrote that it "decided not to seek to modify the consent decrees."  Mike Lee said he "appreciate[d] the agency's thoroughness" and that "the complicated nature of the consent decrees and of the market for musical licenses require[d] such an exhaustive review" like this one.  Now, however, the DoJ is acting as if all the recent effort that everyone put into reviewing the decrees doesn't matter.

As former DoJ official Peter J. Ferrara put it, "[r]eview processes are rarely reopened this soon after closure.  Such occurrences typically mean one thing — the peddling of misinformation from stakeholders who have a hard time taking no for an answer."

The last thing Congress wants is to give the music monopolies more predatory fuel.  To prevent this, Congress included oversight language on the music consent decrees within the Music Modernization Act (MMA), which passed with unanimous consent.  Additionally, members of Congress on both the left and right have sent letters of concern to the DOJ after it announced the new music investigation, including Sens. Lindsey GrahamAmy Klobuchar, and Richard Blumenthal.  But none of this effort will matter if the antitrust committees in Congress don't approach the DoJ with the amount of aggression needed to make an impact.

Sen. Lee was a hero on this issue before, but all of that hard work will be wasted if he does not weigh in again on Tuesday at the rare gathering of his subcommittee.  With the end of the year approaching, Sen. Lee needs to question Makan Delrahim, the assistant attorney general of the Antitrust Division, and become the friend in the Legislative Branch whom music consumers can depend on once more.

Denison Smith  is a former assistant attorney general for the state of Idaho, staffer for Sen. James McClure (R-Idaho), and trustee of the Reason Foundation.