ASCAP Slapped With $1.75 Million Fine for Federal Antitrust Contempt

ASCAP decision
  • Save

The American Society of Composers, Authors and Publishers (ASCAP) has agreed to pay $1.75 million to settle federal antitrust contempt charges, the organization announced on May 12th. The US Department of Justice (DOJ) had been investigating allegations that the performance rights group violated an earlier antitrust settlement, which now pegs ASCAP with multiple federal violations.

ASCAP has stated that the settlement agreement addresses concerns expressed by the DOJ over exclusivity provisions included in certain agreements. The group was found to have executed approximately 150 agreements with songwriters and publishers that made ASCAP their exclusive licensor, which is blatantly illegal under DOJ-enacted regulations. The performance rights society has agreed 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 license their music to anyone independently. That right, sometimes called a ‘carve-out clause,’ enables independent deal-making and represents a threat to PRO’s licensing model.

The settlement 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 long-time structure will ensure that publisher board members do not participate in the approval of new licensing agreements.

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

ASCAP’s mission is to protect the rights of music creators and maintain its unique status as the only member-owned and governed performing rights organization in the US. The $1.75 million 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. These 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, which is indeed an honorable defense. However, the recent settlement may put ASCAP’s moral high ground in question. The DOJ’s investigations and resulting fines should serve as a wake-up call to the organization, which should take heed of the concerns of smaller businesses and local communities.

ASCAP has paid substantial fines before, including a $1.75 million payment in 2011 for antitrust violations. The organization has been trying to modernize its licensing practices and has launched a new platform called ASCAP TuneUp, which provides tools and resources to help music creators grow their careers. Through this platform, ASCAP aims to offer a more flexible and efficient licensing model.

The music industry is rapidly evolving, and ASCAP and other performance rights organizations must adapt to these changes. The rise of streaming services and digital music distribution has created new revenue streams for music creators, but it has also introduced new challenges for licensing organizations. ASCAP must continue to work on modernizing its licensing practices and ensuring that it is not violating any antitrust regulations.

In conclusion, ASCAP’s recent settlement with the DOJ is a reminder that the organization must be vigilant in its efforts to protect the rights of music creators while also adhering to antitrust regulations. The $1.75 million fine is a significant amount, and it could have ramifications for ASCAP’s broader mission. However, ASCAP can use this settlement as an opportunity to improve its licensing practices and work towards a more flexible and efficient licensing model that benefits all stakeholders.

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?