U.S. government backs recording artists in radio fight

December 6, 2019 0 By JohnValbyNation

The U.S. government has weighed in on a long-running court battle over how much a high profile group of songwriters, from Drake to Justin Bieber, can earn from radio play and potentially boosting the chances of their antitrust case against a powerful body representing U.S. radio stations.

The two bodies, Global Music Rights, representing a small group of popular songwriters, and the Radio Music Licensing Committee, which represents some of the country’s largest radio stations, have been trading legal barbs over how much radio stations should pay songwriters for playing their music.

The Justice Department said Thursday that a California judge should reject arguments from RMLC when considering the price-fixing case against the radio stations. If the judge agrees, it would allow the songwriters’ suit against RMLC to proceed.

The move is a blow to the stations, after RMLC filed suit in 2016 arguing anticompetitive behavior by songwriters. GMR counter-sued, calling RMLC a 78-year-old cartel that suppresses rates paid to songwriters’ works in the $22 billion radio industry.

The filing “reaffirms the legal position of GMR and vindicates the rights of artists and songwriters to be free from illegal price-fixing by radio stations,” said Daniel Petrocelli, lead counsel for Global Music Rights. Representatives for RMLC did not respond to a request for comment.

Radio play is a big source of revenue for songwriters and Nashville-based RMLC represents some of the most powerful broadcasters.

Irving Azoff, who manages Bon Jovi and Harry Styles, founded Los Angeles based Global Music Rights in 2013 as a way to raise compensation for songwriters. RMLC negotiates licenses on behalf of radio stations.

While Justice Department attorneys took no position on the facts alleged, it found fault in arguments from the Radio Music Licensing Committee, arguing that a buyer’s cartel can be”equally destructive of competition as a seller’s cartel,” even though these cases come up less frequently. The DOJ said RMLC was wrong to argue that the songwriters’ group would have to prove its intent to cause harm by price fixing.

RMLC first sued GMR in 2016 in Philadelphia, alleging that GMR had attempted to “force commercial radio stations to pay historically high-priced music performance licenses which the RMLC believed to be anticompetitive in nature,” according to a statement on RMLC’s website. The fight has since been moved to California. A trial date is set for November 2020.

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