June 5, 2019 / 7:05 PM / a month ago

U.S. Justice Department to review 1941 ASCAP, BMI consent decrees

WASHINGTON, June 5 (Reuters) - The U.S. Justice Department said on Wednesday it would review two consent decrees reached with music licensing groups ASCAP and BMI in 1941, a decision that could upend the business of licensing music to online companies, movie companies, commercials, bars and restaurants.

The department said it planned to review settlements reached with American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music, Inc. (BMI) to set how the organizations, which license most music in the United States, must operate.

Companies that license music have worried about a sharp increase in costs if the system is changed because ASCAP and BMI license about 90 percent of music.

In the complicated world of music royalties, songwriters and publishers hire the two organizations to license their songs to digital streaming services such as Pandora and Spotify, radio and television stations and other music users.

Under the consent decrees, the two organizations are required to license to anyone upon request, with any pricing disputes settled by a federal judge.

The consent decrees may be maintained as they are now, changed or scrapped altogether, the department said.

"There have been many changes in the music industry, ... and the needs of music creators and music users have continued to evolve," said Makan Delrahim, head of the Justice Department's Antitrust Division, in a statement on Wednesday.

Under Delrahim, the department is reviewing old consent decrees, many of which do not have an expiration date, with an eye toward dropping those which are out of date.

ASCAP and BMI said in statements the Justice Department review would allow for an update of the music licensing business.

"A more flexible framework with less government regulation will allow us to compete in a free market, which we believe is the best way for our music creators to be rewarded for the value of their music," ASCAP CEO Elizabeth Matthews said in an email statement. (Reporting by Diane Bartz Editing by James Dalgleish)

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