The National Association of Broadcasters has remained on the sidelines of the legal fight between the Radio Music License Committee and Global Music Rights since the two swapped antitrust lawsuits three years ago. That is until now. The NAB’s change of strategy was motivated by what it calls an “unorthodox” move by the Department of Justice, which last month filed a brief in U.S. District Court in Los Angeles challenging many of the arguments the RMLC has made in its court case.
In the DOJ’s brief, Assistant Attorney General Makan Delrahim gave District Court Judge Terry Hatter a potential roadmap to follow as he considers the antitrust allegations. Delrahim also took aim at the RMLC itself, saying the trade group has allowed broadcasters, who normally compete against one another for music, to stand in agreement over what the maximum price any of them would pay for that content.
In an 18-page brief the NAB said the Antitrust Division’s move broke with longstanding policy by getting involved in a private lawsuit, especially one at this stage. “It is worth emphasizing that this court owes no deference to the views of the U.S. offered here,” the NAB told Judge Hatter.
The NAB also goes after the antitrust case being made by GMR. It notes that the performance rights organization is operating in an industry that’s been under active DOJ supervision for decades because of antitrust worries that date to 1934 and the early days of radio. The brief says in the decades since, the DOJ has “repeatedly acknowledged” the role of entities like RMLC for the purpose of collectively negotiating reasonable rates from PROs and “ever once to NAB’s knowledge suggested to a court that they were illegal,” it said.
The message from the NAB is similar to the response that the RMLC itself had to the Antitrust Division’s surprise move. The RMLC also called the DOJ’s decision to wade into the court fight a “particularly aggressive” move by a federal agency and also urged Judge Hatter to reject the attempt by the Antitrust Division to “mold statutory interpretation” of the law. “There is nothing unique or difficult about that exercise that requires the court to consider the unsolicited views of a federal agency,” the RMLC said in its brief last month.
The DOJ decision to step into the three-year long fight between the radio industry and GMR came as the Los Angeles court considers competing motions made by each side to have the other’s antitrust suit dismissed. The faceoff began in November 2016 when the RMLC filed an antitrust lawsuit in federal court in Philadelphia alleging GMR violated federal law when it allegedly created an “artificial monopoly” to squeeze higher rates from stations. Two weeks later GMR replied with an antitrust lawsuit of its own which contended the radio consortium is essentially an “illegal cartel.” In April the Philadelphia case was dismissed and the two sides have been doing battle in L.A.
The filing also opened a second battle front between the RMLC and DOJ. The other is in Washington where Delrahim and his team are considering whether to seek modifications or termination of the decades-old consent decrees that govern how radio stations license music from ASCAP and BMI. Broadcasters, including the RMLC, have argued the consent decrees should be left intact since they prevent ASCAP and BMI from upending the music marketplace.
On a recent Inside Radio Podcast, NAB President Gordon Smith agreed the recent steps taken by the Antitrust Division show the DOJ has become a bigger challenge for the radio industry than what’s happening at the Federal Communications Commission or in Congress.