JOURNAL OF BUSINESS ENTREPRENEURSHIP & THE LAW
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Consent Decrees in the Streaming Era: Digital Withdrawal, Fractional Licensing, and § 114(I)

Consent Decrees in the Streaming Era: Digital Withdrawal, Fractional Licensing, and § 114(I)

Clear disagreement exists about how best to reconcile the copyright protections afforded to songwriters with the antitrust considerations protecting consumers. Songwriter public performance royalty collections account for over $2 billion in annual U.S. revenue, roughly 90% of which is collected by the American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music, Inc. (BMI). ASCAP and BMI are performance rights organizations (PROs) regulated by seventy-five-year-old consent decrees. After the Second Circuit determined that these consent decrees prohibit music publishers from selectively withdrawing their new media rights from ASCAP and BMI to directly negotiating with new media services, the PROs and major publishers petitioned the DOJ to amend their consent decrees. However, after two years of review, the DOJ decided to issue clarifications regarding the practice of fractional licensing, which, despite the similar sounding name, is distinct from partial withdrawal. The DOJ’s decision to mandate 100% licensing broke with industry practice, prompting BMI to seek declaratory judgment favoring fractional licensing; the DOJ subsequently appealed. As fractional licensing is set for appeal, the consent decrees seem ripe for further review. This Comment seeks to provide a framework for interpreting relevant legal and economic concerns.

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