U.S. Justice Department loses fight with BMI over fractional music licensing

Fri Sep 16, 2016 7:16pm EDT
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By Diane Bartz

WASHINGTON (Reuters) - The government lost a fight with music licensing giant BMI on Friday over whether it needed to change how it collects royalties for music.

The Justice Department had said in August that it would require the American Society of Composers, Authors and Publishers, or ASCAP, and Broadcast Music Inc, or BMI, to only license music to digital streaming services, radio and television stations, bars and other music users if they could issue a "full-work" license.

Requiring full-work licenses raised complications for a certain group of songs - no one knows how many - where songwriters did not agree to give each other joint ownership to the songs. ASCAP and BMI had been issuing "fractional" licenses for songs and assuming that if services took licenses with both ASCAP and BMI that all royalties would be paid.

BMI challenged the Justice Department's decision, and a hearing was held at 3 p.m. on Friday in the U.S. District Court for the Southern District of New York.

In his ruling, which was issued just before 5 p.m., Judge Louis Stanton took issue with the Justice Department, citing a decades-old consent decree between BMI and the government, which is still in effect.

"Nothing in the consent decree gives support to the (Justice Department Antitrust Division's) views," wrote Stanton. "It (the consent decree) does not address the possibilities that BMI might license performances of a composition without sufficient legal right to do so."

The Justice Department has similar consent decrees in effect with ASCAP and BMI. The change had affected both of them but only BMI challenged it in court.

BMI President and Chief Executive Officer Mike O’Neill said in a statement that he was "gratified" by the Judge's ruling. "Today’s decision is a victory for the entire music community,” he said.   Continued...