According to Billboard, the Department of Justice consent decree review is going to attempt to amend the consent decrees with ASCAP and BMI to the great disadvantage of songwriters after delaying a modernization of the consent decrees for years.
The U.S. Department of Justice struck a major blow Wednesday to U.S. music publishers and performing rights organizations.
A nearly two-year process to amend the consent decree so that music publishers would have the right to withdraw digital licensing from the blanket licenses offered by ASCAP and BMI — the two performing rights organizations operating under a DOJ consent decree since 1941 — has ended with no changes to the consent degree, much to the chagrin of major publishers like Sony/ATV, Universal Music Publishing Group and BMG.
The DOJ made another decision that will displease publishers: It is moving ahead with its interpretation that the two PROs must use 100-percent licensing and can no longer engage in fractionalized licensing — meaning that any rightsholder in songs with multiple songwriters, who may be represented by different PROs, has the right to license the entire song to a user, as long as he accounts to and pays the other songwriters.
At the very least, music publishers fear that this change will lead to reduced royalty rates for songwriters because it will allow music services to rate-shop among the licensors for the lowest rate.
That also means that it is almost a certainty that all digital music services will merely check the box on good faith rate negotiations so they can sue ASCAP and BMI songwriters in rate court.
Why might the Department of Justice engage in this bizarre charade to the great benefit of Google? Easy–Renata B. Hesse, the head of the Department of Justice Antitrust Division that is in charge of the consent decrees.
Ms. Hesse, in her own words, used to do a lot of work for Google shortly before joining the Justice Department–and the division that is making this bizarre decision that benefits Google.
According to an interview from 2008, she was pretty busy with one of her then law firm’s most important clients:
Renata Hesse: Typically when we do counseling, people come to us and say, “Hey, I really would like to do this. Is that okay?” and sometimes you get some pretty interesting questions that way. Usually, the business people are the ones who are thinking of the clever ways of making sure that their products succeed and not the lawyers.
Adrian Bye: Right. There’re been obviously antitrust issues between Google and Yahoo! Are you able to comment on any of those?
Renata Hesse: I’m not, really, I’m afraid since I did a lot of work for Google on it.
So Ms. Hesse would recuse herself from commenting on Google in a mere interview, but is leading the attack on PROs in her current position for the benefit of Google.
This should come as no shock given the DOJ’s repeated failure to prosecute Google for antitrust violations–for which Google is being prosecuted in Europe where Google has failed to control the 27 governments of the member states of the European Union.
Ms. Hesse is just another example of the Obama Administration’s well known revolving door with Google. The Google Transparency Project illuminates the unprecedented influence that Google has over the U.S. Government.
Songwriters should not be surprised by the DOJ’s position given that Google wants to undermine a songwriters ability to bargain collectively so that Big Tech can keep creators weak, fractionalized and fighting each other.
The idea that the most valuable multinational corporation in the world needs to be protected from songwriters is a joke. Unfortunately, the Department of Justice doesn’t see the humor.
The Department of Justice is attempting to change the rules of the road to something manufactured out of thin air and then pretending those new rules were there all along. Songwriters must ask why?