PHILADELPHIA – The docket of a Pennsylvania federal court, rather than the Billboard charts, is the setting for legal action by a radio industry group who claims a music performance rights organization violated anti-trust law.
On Nov. 18, plaintiff Radio Music License Committee, Inc. (RMLC), on behalf of its thousands of member radio stations nationwide, filed suit against Global Music Rights, LLC (GMR), claiming GMR acts as a monopoly and charges “extortionate” royalty fees for RMLC to play its repertory music on radio stations across the country.
The complaint says GMR, a fairly new music performance rights organization in business since 2013, operates as a for-profit enterprise in selling licenses to play the music in its catalog – in contrast to similar groups like the American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music, Inc. (BMI) which are non-profit – and has executed a monopoly in the process.
“In particular, in the last two months, GMR has implicitly threatened to sue radio stations that do not quickly agree to its terms and purchase a license. GMR has emphasized Jan. 1, 2017, as the deadline for obtaining a license because, as of that date, the stations’ ‘licenses-in-effect’ with ASCAP and BMI will cease to cover songs that have moved to GMR’s repertory,” the complaint reads.
Without such a license, RMLC would be faced with statutory financial penalties of $150,000 for every playing or performance of any GMR-exclusive song.
The complaint notes consent decrees were put into practice to govern groups like ASCAP and BMI, after they were sued by the U.S. Department of Justice (DOJ) 75 years ago. The DOJ refused to reconsider the consent decrees earlier this year, feeling such safeguards were still necessary to prevent music performance rights organizations from engaging in anti-trust conduct.
Moreover, another for-profit music performance rights organization, the Society of European Stage Authors and Composers (SESAC), paid a $3.5 million settlement and made itself subject to private rate regulation last year until 2035, after the plaintiff served them with an anti-trust suit four years ago.
Now, RMLC believes GMR is responsible for the same conduct that previously landed ASCAP, BMI and SESAC in federal court.
“We feel that GMR’s exorbitant fee demands are out of balance with their competitors and would do irreparable harm to our industry, and this has left us with no other alternative,” RMLC Chairman Ed Christian said.
In the instant case, the plaintiff says the defendant committed monopolization and attempted monopolization, in violation of Section 2 of the Sherman Act.
The plaintiff seeks a declaration of the defendant’s conduct as violating the Sherman Act, mandatory injunctive relief in the form of a judicial rate-making procedure like those by which similar organizations ASCAP and BMI are bound by and preventing the levying of monopoly-like prices upon the plaintiff to play GMR-controlled music during the disposition of the case, attorney’s fees, costs and other relief the Court deems just and proper.
The plaintiff is represented by Peter J. Mooney of White & Williams in Philadelphia, plus Margaret M. Zwisler, Jennifer L. Giordano and Alfred C. Pfeiffer Jr. of Latham & Watkins, in Washington, D.C., and San Francisco.
The defendant has not yet secured legal counsel, according to Court records.
U.S. District Court for the Eastern District of Pennsylvania case 2:16-cv-06076
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at email@example.com