Radio Trade Group Seeks To Change SESAC’s Tune In Antitrust Action

SESAC, the performance rights organization formerly known as the Society of European Stage Authors & Composers, is facing a second antitrust lawsuit brought by broadcast groups after the Radio Music License Committee (“RMLC”) filed a complaint in the U.S. District Court for the Eastern District of Pennsylvania alleging that SESAC’s blanket fees for songs are anticompetitive.

SESAC is one of three performance rights organizations that work with songwriters and musicians to give the media and consumers the ability to use copyrighted music through licenses.  RMLC is a radio trade group comprised of thousands of radio stations in the United States.

According to RMLC’s complaint, SESAC has allegedly used its for-profit status to establish a monopoly.  Not only are the other two performing rights organizations, BMI and ASCAP, non-profit organizations, but their fees are regulated pursuant to consent decrees with the U.S. Department of Justice (“DOJ”).

RMLS alleges that SESAC has used higher royalty fees to entice the most popular and profitable artists to join their repertory.  The SESAC repertory includes songs from music legends such as Bob Dylan, Neil Diamond and Rush as well as current pop hits by Enrique Iglesias and Usher.

RMLC alleges that broadcasters cannot avoid using SESAC songs.  According to RMLC, its stations are forced to purchase SESAC licenses at high prices due to the organization’s practice of charging blanket fees rather than licensing a few songs, artists’ collections or songs in one musical genre.

The complaint also accuses SESAC of conspiring to eliminate competition by entering into exclusive agreements with each of the 23,000 artists in their repertory, which prevent SESAC affiliates from licensing their music to RMLC members directly.

In contrast, the consent decrees entered in antitrust suits brought by the DOJ bar BMI and ASCAP from mandating blanket fees or entering into exclusive agreements with the artists.

RMLC isn’t the first group to allege that SESAC’s licensing fees are exorbitant and anticompetitive.  A similar antitrust action filed in 2009 by a group of local television stations is pending in the U.S. District Court for the Southern District of New York.

Tagged in: Antitrust Litigation, Monopolization,