Feds Nail Arts Licensing Group on Exclusive Deals

     MANHATTAN (CN) — The American Society of Composers, Authors and Publishers caught heat in court for thwarting a 75-year-old federal antitrust action.
     A judgment against ASCAP in the case dates back to 1941, but has been amended twice, most recently in 2001.
     The U.S. government petitioned to have ASCAP held in contempt last week, saying the licensing organization entered into 150 exclusive contracts, despite its commitment not to interfere with the ability of members to directly license their songs
     ASCAP reached the 150 problematic contracts with composers, songwriters and publishers.
     The Justice Department notes that about 100 of the contracts had terminated of their own accord by late 2015. ASCAP rescinded the provisions of exclusivity in the remaining contracts that September.
     A settlement filed simultaneously with the petition Thursday requires ASCAP to pay a $1.75 million, but the crux of the deal holds ASCAP to reforms.
     In addition to a promise not to enter into further exclusive contracts, ASCAP must reform its licensing practices to remove music publishers from overseeing ASCAP’s licensing.
     ASCAP additionally must submit quarterly communications logs to the Department of Justice with any communications regarding failure to comply with the order.
     The $1.75 million settlement compensates the United States for the time of its attorneys, economists and paralegals, and to “reflect the seriousness of ASCAP’s repeated violations,” court filings show.
     The settlement agreement notes that ASCAP’s counsel represented to Department of Justice Trial Attorney Kelsey Shannon that it did not object to the proposed settlement.
     ASCAP’s problematic contracts granted it exclusive licensing rights to all work a member had written during the term of membership, as well as any future works they write or co-wrote during their term of membership with ASCAP.
     ASCAP no longer employs the department head responsible for the improper contracts, according to the government’s memorandum.
     Representatives of ASCAP would not comment beyond a statement from the CEO last week.
     “Settling this matter was the right thing to do for our members,” ASCAP CEO Elizabeth Matthews had said Thursday. “With these issues resolved, we continue our focus on leading the way towards a more efficient, effective and transparent music licensing system and advocating for key reforms to the laws that govern music creator compensation.”
     ASCAP and the government face a conference on the settlement on June 16 before U.S. District Judge Denise Cote.
     The group is represented by Paul, Weiss, Rifkind, Wharton & Garrison.
     In May 2015, the Second Circuit sided against ASCAP in its copyright feud with Pandora.

%d bloggers like this: