ASCAP Slapped With $1.75 Million Fine for Federal Antitrust Contempt

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The American Society of Composers, Authors and Publishers, or ASCAP, announced today (May 12th) that they have agreed to pay $1.75 million and change its licensing practices to settle federal antitrust contempt charges.

The US Department of Justice had been investigating claims that the performance rights organization violated an earlier antitrust settlement, a situation that now pegs ASCAP with multiple federal violations.

ASCAP says that the settlement agreement addresses concerns expressed by the DOJ over exclusivity provisions included in certain agreements.  Indeed, the group was found to have executed roughly 150 agreements with songwriters and publishers that made ASCAP their exclusive licensor.  Those are blatantly illegal under DOJ-enacted regulations, with the performance rights society agreeing to strike the provisions from identified contracts.

The violation relates to DOJ- and court-structured consent decrees, which give songwriters and publishers the right to independently license their music to anyone.  That right, sometimes called a ‘carve out clause,’ enables independent dealmaking and represents a threat to PRO’s licensing model.

The monstrous fine for bad behavior could compromise ASCAP’s broader mission, especially when it comes to cracking down on smaller restaurants and venues.  The powerful PRO has been known to force payments from mom-and-pop establishments, sometimes running them out of business.  Those actions sometimes draw ire from community members and local journalists, who accuse the organization of unfair bullying by a well-financed gang.

ASCAP has always replied that they’re fighting for artists, indeed an honorable defense.  Now, that moral high ground may be less solid.

The Agreement maintains the group’s current Board of Directors structure of 12 songwriter and composer members, and 12 music publisher members elected by the broader membership.  That longtime structure will ensure that publisher board members do not participate in the approval of new licensing agreements.

“We took immediate steps to resolve this matter and have strong controls in place moving forward,” said Paul Williams, ASCAP President and Chairman.  “This settlement enables ASCAP to focus on our mission of protecting the rights of music creators, who depend on us for their livelihoods, and to maintain our unique status as the only member-owned and governed performing rights organization in the US.”

The Settlement Agreement was approved by the ASCAP Board of Directors and is now subject to the approval of a Federal Rate Court Judge.

Below is the proposed order.

6 Responses

  1. Sound Of Literati

    That sound like some of the shit , Derek Sivers , and
    CD Baby used to trap unsigned artist inside that no money down, upfront or the back end no sale cluster fuck

  2. Versus

    GoogleTube is the one who should be paying up.

    • doos

      maybe you should hire a lobbyist to buy a congressman to change the law like all you usually do.

  3. Troy

    All I read in this that it will cost us that already pay ASCAP more money then the ridiculous high fee we already pay.

  4. Bev

    @Troy – NO, it means that those of us (especially small venues) who book singer/songwriters and have them play ONLY their own original music, now CLEARLY have the option of having each musician we book grant us an individual license – without going thru ASCAP and without having to pay a dime to ASCAP. If/when ASCAP agents comes calling, demanding their ridiculous fees, we can tell their agents to go suck vacuum without having to risk winding up in court. In fact, under the original terms of the earlier antitrust settlement agreement, songwriters and venues already HAD the right to enter into such agreements…but most did not realize it.

    One thing I do wish the U.S. had insisted be included in the settlement agreement was a provision requiring ASCAP to make the “carve-out clause” in their contracts with songwriters/publishers in bold font that is least 4 pts larger than the font size of the remainder of the body of the contract. That way ASCAP could no longer hide the existence of the carve-out provision from the music creators…as it has been doing for years!

    Second thing I wish the settlement agreement included was a provision that whenever ASCAP approached any venue about licensing fees, that it be required to inform the venue that the venue had the option of entering into individual performance licensing agreements with each songwriter/publisher in ASCAP’s catalog instead of with ASCAP and that, so long as only songs covered by those individual licensing agreements were performed in the venue, the venue was NOT liable to an infringement suit by ASCAP. That would put a bit of a leash on ASCAP’s current strong-arm techniques.

    As for Paul Williams’ statement that “music creators… depend on us for their livelihoods…,” that MAY be true for a hundred or so of the biggest names in top-forty songwriting. But most of the thousands and thousands and thousands of songwriters out there trying to eke out a living in music today, depend on tiny venues like house concerts, coffee houses, and Mom&Pop barbecue joints -and on their day jobs – for their livelihoods! Every time one of those tiny venues closes down or stops allowing music because they can’t afford ASCAP, BMI, and SESAC licensing fees, it gets a little bit harder for up-and-coming songwriters to continue in the business.

  5. doos

    oh yeah i remember ascap. they are the guys that tried to get people to pay money every time a ringtone went off right?