Congress and the Trump Administration Must Restrain “Music Mafia”

Today, Congress and Trump administration must answer an important question: Just what, if anything, should be done about the regulations restraining the entertainment industry?

At issue is whether the 77-year-old federal agreements between the Department of Justice (DOJ) and the music industry’s two largest performance rights organizations (PROs) should stay or go. It’s a decision that Makan Delrahim, the head of the Antitrust Division, suggests that the Trump administration is taking very seriously.

Some right-leaning thinkers might immediately conclude that show business’ polarizing political behavior warrants the constraints. After all, those in entertainment, particularly the music industry, have been rather hostile to Republicans. Finding artists to perform at President Trump’s inauguration — a day once hailed as the peaceful transfer of power — was like pulling teeth. Even more telling is how 83 percent of the industry’s political donations this year went to Democrats, a number that was shockingly eight percentage points higher in the 2016 election cycle.

But conservatives are better than this. They don’t regulate just for regulating’s sake. In fact, the only time they endorse putting new federal restrictions in place is when, in the absence of market forces, one company’s lack of consideration for consumers necessitates it.

However, in the business world, one’s political habits often correlate with one’s behavior.

In this case, the music industry’s anti-free market politics match up perfectly with its anti-free market business practices.

Although music publishers normally compete against each other, in the realm of performance rights licensing, they joined forces into ASCAP and BMI, two music collectives that control 90 percent of the entire marketplace.

The monopoly they’ve reaped is far from a natural one: the only reason it exists is because they leverage the anti-competitive, restrictive nature of government copyright laws to their advantage. In other words, they use federal rules intended to protect songwriters for personal gain.

And so, in the absence of government restraints, the sky is the limit on what they can charge small businesses to play music.

As one can imagine, this set-up quickly became the enemy of small businesses everywhere, from hotels and restaurants to bars and pubs. That’s why in 1941, the Justice Department put them under federal consent decrees; agreements that stop marketplace abuse by preventing the price gouging caused by the monopolistic federal laws ASCAP and BMI take advantage of.

These settlement agreements shouldn’t be controversial.

In fact, in 2016 even the Obama administration, which was practically the entertainment industry’s best friend and regularly held fundraisers in Hollywood, ruled that they should remain as-is after ASCAP and BMI requested that the DOJ review the matter.

Nevertheless, ASCAP and BMI will seemingly do anything to make an extra dollar. According to a July 1 report, Oregon, Colorado, Nevada, and Washington have enacted laws to dis-incentivize them from threatening small business owners with after-hours calls, mafia-like in-person visits, and the use of coercive language.

These organizations are persistent, so it’s not surprising that this consent decree issue has sprouted up yet again in 2018.

But the issue doesn’t have to last for long.

Thanks to a measure put in the Music Modernization Act, U.S. Senate Antitrust Subcommittee Chairman Sen. Mike Lee, R-Utah, and Ranking Member Sen. Amy Klobuchar, D-Minn., and the rest of Congress will now have more voice over the consent decree review process and the opportunity to inform the Trump administration on the need to protect small businesses nationwide.

Given that President Donald Trump has long understood the problem that government-created power brings, Congress’s input shouldn’t fall on deaf ears at the White House.

Republicans were elected to office, and sent to Washington, D.C., to increase competition and innovation — not reduce them. It would be quite embarrassing if Congress failed at securing these two agenda items when dealing with the entertainment industry, a sector which does not make its resistance to embracing market forces a secret.

Congress and the DOJ know what they need to do.

It’s just a matter of hitting the right notes.

Originally published in Newsmax as Music Industry Needs to Get in Tune With Innovation, Free Markets | Newsmax.com

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