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US antitrust officials decline to change agreements on songwriting royalties

On Thursday, the U.S. Justice Department's antitrust division said it won't be seeking any changes to agreements on songwriter royalties, maintaining the status quo for streaming services like Pandora and Apple Music.




The announcement comes at the end of a two-year investigation by the Department, Bloomberg reported. Specifically the agency was looking into consent decrees with Broadcast Music Inc., and the American Society of Composers, Authors and Publishers, better known as ASCAP. The two organizations sought the review after legal conflicts with Pandora over royalty payments.

Publishers, such as Sony/ATV, wanted agreements changed to be able to "partially withdraw" from ASCAP and BMI, giving them the freedom to negotiate performance licenses directly with streaming services. Pandora was opposed to this, since such arrangements might have substantially driven up royalties, risking the viability of its business. At the same time, musicians, distributors, and publishers alike have often complained about how marginal streaming share can be —frequently it's only supplemental income for artists, despite the streaming market surpassing CD and download sales.

Both ASCAP and BMI are unhappy with the investigation's result, and promising to challenge it in court. Sony/ATV CEO Martin Bandier described the Department's decision as "misguided," suggesting that both courts and the U.S. Congress will have to deal with the problem.

The ruling stands to benefit not just Pandora but rivals like Spotify and Apple Music, which already sacrifice the bulk of their revenues in royalty payments. Recently Apple proposed an alternate system that would have sharply impacted competitors offering free ad-based listening.